The Financial Services Agency (FSA) of Japan is said to be curtailing the activities of cryptocurrency exchanges that have poor identity verification processes or provides anonymous transactions. The move is reported to be part of the country’s preparations for the Financial Action Task Force (FATF) inspections this fall.
The Nikkei Asian Review recently reported that the FATF might dispatch its investigatory division to assess the strength of the FSA’s regulations on anti-money laundering (AML). This includes policies for crypto exchanges and different financial accounts.
Lowest Grade for Identity Authentication Given to Japan
The FATF allegedly gave Japan the lowest possible grade for identity authentication in financial organizations in its 2008 report. Ten years later, Japan’s FSA gave businesses that don’t have appropriate AML policies orders to improve their practices.
The FSA had a major overhaul last year in a bid to better address the demands of managing the cryptocurrency and fintech sectors. It’s also sitting on seven pending applications for crypto licenses in Japan. The organization is tasked to review the applications, which have over 400 questions.
The FATF had amended its regulations last year to include cryptocurrency exchanges in its AML regulative structure. It also urged G7 members to put into action policies for filing, licensing, and overseeing crypto exchanges.
Japan to host Summit in Osaka Next Month
Japan is set to host the Summit on Financial Markets and the World Economy in Osaka next month. The country is expected to head the discussion on global crypto laws and initial coin offerings (ICOs). Japan does not have a ban on ICOs, unlike its neighbors South Korea and China.