Japan’s financial service agency (FSA) has reportedly beefed up its regulatory framework for crypto exchanges. This move comes after earlier reports that it was working on altering its existing regulations.
The Japan Times reported on September 2 that the financial regulator is adding screening requirements to its existing regulatory framework for cryptocurrency exchanges. The additional screening processes will assess exchanges’ risk management systems and their connections to ant-social groups.
The existing screening requirements focus on exchanges’ financial strengths as well as their security measures. With the upgrade of the legislation, the number of questions in screening applications has increased exponentially.
Some of the new introductions require exchanges to submit board meetings records in addition to their shareholders’ information so as to verify that they are not connected to anti-social groups.
The report stated that exchanges are mandated to submit the proceedings of board meetings. So as to ascertain that topics relating to the platform’s security and its financial growth are extensively discussed.
The End of Crypto-Related Cybercrime in Japan?
It would seem that Japan is fighting crypto-related crimes with all the resources at its disposal. Earlier it was reported that the nation’s police force was planning on implementing crypto transactions tracking software for investigations. There was also a report that a Japan-based cybersecurity firm had discovered Bitcoin BTC ATM malware.
After the Coincheck hack in January, Japan’s FSA had carried out an extensive inspection of crypto exchanges operating within its borders. The inspection revealed that majority of crypto exchanges had not upgraded their security systems. In addition to this, crypto exchanges were unable to submit minutes of board meetings to the commission.
This led to the application withdrawal of 13 crypto exchanges who were allowed to operate while the commission reviews their application. Six other licensed exchanges were issued business restructuring orders.
At the moment, a total of 160 crypto exchanges are planning on joining the Japanese crypto market. Therefore at present it has about 100 crypto exchanges. The influx of the Japanese crypto market is as a result of China’s ban on crypto trading and ICOs.