Japanese Regulator FSA Stepping-Up Measures To Strengthen Its Policies for Local Crypto Exchanges
Japan’s topmost financial regulatory body - Financial Services Agency (FSA) has stepped its measures to monitor transactions on cryptocurrency exchange after heightened concerns of money laundering activities using cryptocurrencies.
On Wednesday, May 22, Japan’s local news publication Asian Nikkei Review notes that the FSA is “stepping up its countermeasures” which include conducting extensive and thorough inspections of the operations of local cryptocurrency exchanges.
Japan is one of the most crypto-friendly nations allowing crypto trading and other related activities to take place in its homeland. However, after several reports of illicit activities and exchange hacks, regulators are keeping a strict vigilance over the crypto activities. Last month, the FSA investigated crypto exchange Fisco and Huobi Japan to asses AML provisions and customer protection.
As per the local sources, Japan’s intergovernmental body will all the ongoing efforts by the FSA and steps taken to mitigate cryptocurrency money-laundering activities. The regulator will also be having key discussion with its global counterparts on financial crimes involving cryptocurrencies during the upcoming G20 summit next month in Osaka, Japan.
Being one of the top ten global economies, Japan needs to make sure that it has the right policy framework to deal with bad actors in its financial ecosystem. Thus, it is making sure that the local crypto exchanges do not allow its customers to perform anonymous transactions. The FSA is likely to bring new improvements in customer identification process at the exchanges.
Japan has been one of the biggest victims of exchange hacks and external attacks losing millions of dollars in cryptocurrencies. In March 2019, a panel of experts reported to the U.N. Security Council that North Korea is one of the major sources of cyberattacks stealing cryptocurrencies.
It noted that North Korea has been successful several times in stealing cryptocurrencies from a majority of the Asian crypto exchanges.
The report stated: "Cyberattacks involving cryptocurrencies provide the Democratic People's Republic of Korea with more ways to evade sanctions given that they are harder to trace, can be laundered many times and are independent from government regulation.”