Japan’s Financial Regulator Calls for Increased Scrutiny on Crypto Transfers
Japan’s Financial Services Agency (FSA) is urging institutions to tighten their scrutiny on cryptocurrency transfers, citing a rise in cases of fraud and unlawful money transfers. The FSA, along with the National Police Agency (NPA), has issued a joint note emphasizing the need for user protection and security measures when transferring funds to crypto service providers.
The FSA and NPA have outlined two guidelines to enhance scrutiny. The first guideline suggests freezing transfers to crypto exchanges if the sender’s name differs from the account name. The second guideline encourages increased surveillance of unlawful transfers to crypto exchanges.
Preparations for Greater Crypto Adoption in Japan
Although Japan lacks a comprehensive regulatory framework for cryptocurrencies, there are indications that it is preparing for wider adoption. The Bank of Japan (BoJ) is planning to pilot a central bank digital currency (CBDC), while the FSA has proposed legislative amendments to facilitate decentralized autonomous organizations (DAOs).
The FSA’s proposal would grant legal rights to DAO token holders, similar to those of limited liability company members. Additionally, local authorities in Kochi have signed an agreement to virtualize the city using a metaverse application, aiming to attract online tourists in the near future.
The FSA is currently seeking public comments on its proposed amendment until March 4th.
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