The Financial Services Agency (FSA), which doubles as both Japan’s crypto and financial regulatory watchdog, has ordered all bitcoin trading venues and digital assets exchanges in the region to strengthen their know-your-customer (KYC) and anti-money-laundering (AML) measures, as part of preparation for the upcoming G-7 summit and FATF inspection, reports Nikkei on May 22, 2019.
FSA Fixing the Loopholes
Per sources close to the matter, the FSA is increasing its countermeasures for money laundering and all forms of illicit practices in the nation’s financial sector, including its cryptospace.
Though the FSA has been working hard to sanitize its cryptocurrency ecosystem for quite some time now, this latest move has been triggered by the upcoming inspection of the region’s anti-money laundering regime by the Financial Action Task Force (FATF) this fall, as well as the G-20 summit slated for this summer.
Reportedly, Japan will be the chair of this year’s G-20 meeting, where money laundering countermeasures is one of the hottest topics to be discussed.
Against that backdrop, the FSA is trying as much as possible to avoid falling behind other participating states in terms of AML policy implementation.
Crypto Exchanges Asked to Sit Tight
As reported by BTCManager in April 2018, Japanese regulators mandated crypto exchanges in the nation to delist privacy-centric cryptoassets like dash, monero, and zcash, in a bid to curb anonymous trading and money laundering.
Though some exchanges including the now-revamped Coincheck, have since stopped supporting such altcoins, it is still unclear whether all the cryptocurrency trading venues in Japan have complied.
Now, the FSA has made it clear that it would not spare exchanges that are found wanting,