Japan’s Financial Services Agency Tightens Monitoring of Crypto Transactions
In an effort to crack down on financial crimes involving digital currencies, Japan’s Financial Services Agency (FSA) has issued a directive to financial institutions across the country. The FSA is calling for enhanced monitoring of transfers to digital currency exchange providers, as a significant amount of damages from fraud and unlawful money transfers are being funneled into the crypto ecosystem. To mitigate this risk, the FSA advises financial institutions to strengthen user protection and take measures such as halting transfers when the sender’s name doesn’t match the account name. The FSA also emphasizes the need for comprehensive monitoring of illicit transfers to digital currency exchanges.
Japan’s Balanced Approach to Crypto Regulation
While Japan recognizes the potential of digital assets, it has taken a cautious yet open approach to their regulation. The recent guidelines from the Japanese Crypto Asset Business Association (JCBA) on Initial Coin Offerings (ICOs) exemplify this balanced approach. These guidelines aim to improve transparency and regulatory compliance in ICOs. Despite increased monitoring and potential restrictions on certain types of crypto transfers, Japan remains forward-thinking in its attitude towards digital assets. The government has allowed startups to raise funds through cryptocurrencies and approved a tax reform that benefits corporations holding crypto assets long-term by exempting them from paying taxes on unrealized gains. This reform was granted after the Japan Blockchain Association (JBA) petitioned for a review of taxes on digital currency assets.
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