Japanese government plans to regulate trading of bitcoins and other virtual currencies amid the investigation of Tokyo-based bitcoin exchange Mt. Gox.

Finance Minister Taro Aso said in a press conference that the Japanese government plans to regulate trading of bitcoins and other virtual currencies. The Financial Services Agency (FSA) will likely introduce a system in which operators are required to register, obtain a license, confirm the identity of their clients and improve their internal management systems.

Taro also noted that the government has to carry out studies on how to properly regulate virtual currencies, as a response to an international trend of bitcoins being used for money laundering and extortion.

Mt. Gox CEO Mark Karpeles was arrested in Tokyo for manipulating transaction records in his company’s trading system to inflate the balance of an account under his name.