Japan’s Financial Regulator Proposes Measures to Protect Users from Unlawful Transfers to Cryptocurrency Exchanges
Japan’s Financial Services Agency (FSA) is taking steps to protect users from fraudulent transactions involving crypto assets. The FSA has identified a high number of unlawful transfers in the country, most of which involve cryptocurrencies. To address this issue, the FSA is implementing measures that could complicate the peer-to-peer (P2P) transaction market.
Calling on Banks to Strengthen User Protection
The FSA and the National Policing Agency (NPA) are urging banks to enhance the protection of their users. One initiative involves increasing monitoring of illicit transfers to crypto asset exchange service providers. The Japanese version of the document suggests rejecting such transfers for individual and corporate accounts.
Potential Impact on P2P Market
Rejecting transactions from one person’s bank account to another’s crypto wallet could have significant consequences for the P2P market. P2P platforms rely on sender and recipient names being different between fiat and crypto ends of a transaction. If Japanese banks refuse these transactions, it could disrupt the P2P market.
Japan’s Approach to Digital Asset Supervision
Japan is known for its meticulous approach to digital asset regulation, ensuring compliance with evolving frameworks. Recent initiatives include tax reforms for cryptocurrencies, such as the elimination of taxes on unrealized gains for Japanese companies starting April 1, 2024. Additionally, token issuers were exempted from a 30% tax on unrealized profits from coins issued and held since June 2023.
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