Japan’s financial Services Agency (FSA) is reportedly cracking down on crypto exchanges that provide anonymous transactions or have weak identity verification practices in preparation for inspection by the Financial Action Task Force (FATF) this fall. Nikkei Asian Review reported the development on May 22.
The FATF can reportedly send its investigative arm to review the strength of the Japanese FSA’s anti-money lavation (AML) policies, which incorporates policy for crypto exchanges and alternative monetary services.
Japan reportedly was given the worst potential score for identity verification in monetary establishments during a 2008 report by the FATF. A decade later, the Japanese FSA issued business improvement orders to practices that failed to take applicable AML measures, like permitting users to sign on for his or her accounts with a PO box in lieu of a private home address.
According to the report, Japan was the primary country to implement a registration system for cryptocurrency exchanges.
In October, the FATF amended its rules to incorporate crypto exchanges in its AML regulative framework, and implored G-7 member countries to start out implementing ways for registration, licensing, and observation crypto exchanges.
Japan is hosting the Summit on monetary Markets and also the World Economy (G20 2019) in port this June, and can be expected to speak address the forum on international crypto laws and initial coin offerings (ICOs). not like China and South Korea, Japan has not declared a national ban on ICOs.
As antecedently reported on Top Market Group, Japanese FSA revealed in Jan that there are presently seven unfinished applications for crypto exchange licenses within the country. The applications are reviewed over a six-month amount because the financial institution scrutinizes the applicant’s responses to over 400 queries.
In July of last year, the FSA underwent major restructuring so as to raised meet the challenges of regulation the fintech and cryptocurrency sectors.
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