Japan's Financial Services Agency (FSA) plans to strengthen internal audit processes for financial institutions, including virtual currency exchanges. According to a recent statement, the agency aims to address gaps in the industry and align with global standards in regulatory compliance.
The Financial Services Agency said it will use the roundtable to consider improving internal auditing in Japan's financial sector.
Key participants include representatives from the Japan Virtual Currency Exchange Association, as well as financial industry organizations such as the Japan Financial Services Association, the Japan Payment Services Association, and the Japanese Bankers Association.
This effort follows a recent Financial Services Agency oversight report that highlighted weaknesses in auditing and scrutiny at these companies. The Financial Services Agency plans to revise its “Current Status and Issues'' guidelines in order to strengthen audit measures that reflect international regulatory trends.
Crackdown on unregistered exchanges
The FSA's efforts follow recent warning letters to five crypto exchanges accused of operating without proper registration. These exchanges include Bitcastle LLC, Bitget Limited, Bybit Fintech Limited, KuCoin, and MEXC Global.
In Japan, exchanges serving local people must register with the Financial Services Agency or Local Finance Bureau. The financial regulator said unregistered exchanges were operating outside the scope of its supervision, raising concerns about the segregation of customer assets and platform security.
The Financial Services Agency warned that users of unregistered exchanges may not receive asset protection or compensation under Japanese law. This regulatory gap can leave customers vulnerable in the event of a dispute or unforeseen incident.
cautious approach
These developments suggest that Japan continues to adopt a cautious approach towards cryptocurrencies and focus on consumer protection.
This week, Japanese Prime Minister Shigeru Ishiba revealed that the Asian country has no intention of incorporating Bitcoin into its reserves, despite its growing global acceptance. He said the high volatility of digital assets like Bitcoin defeats the purpose of the country's fiscal reserve strategy.
Japan has reportedly taken a strict stance against cryptocurrency-related exchange traded funds (ETFs), despite their unprecedented success in markets like the US. Maintained.
Despite this cautious stance, the country positions itself as a digital asset-friendly country. Recent initiatives include a landmark economic stimulus package featuring reforms to the country's crypto taxation laws.
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