Japan's Financial Services Authority (FSA) plans to strengthen internal audit processes at financial institutions, including cryptocurrency exchanges. According to a recent StatementThe agency aims to address industry gaps and align with global standards in regulatory compliance.
The FSA announced that a panel will be used to review the improvement of internal auditing in Japan's financial sector.
Key attendees will include representatives from the Japan Cryptocurrency Exchange Association and other financial industry groups, including the Japan Financial Services Association, the Japan Payment Services Association and the Japan Bankers Association.
The initiative follows a recent FSA regulatory report that highlighted poor audit and review practices among these firms. The FSA plans to revise its “current status and issues” guidance to include enhanced audit practices that reflect international regulatory trends.
Suppression of unregistered exchanges
The FSA's efforts follow the latter Warning letters to five crypto exchanges accused of operating without proper registration. These exchanges include Bitcastle LLC, Bitget limited, bye bit fintech limited KuCoinand Mexico global
In Japan, exchanges that serve locals must register with the FSA or a financial bureau. The financial regulator said any unregistered exchange would operate outside its supervision, raising concerns about client asset segregation and platform security.
The FSA warned that users of unregistered exchanges may not have access to asset protection or compensation under Japanese law. This regulatory gap can leave customers vulnerable during disputes or unforeseen events.
Cautious approach
These developments show that Japan continues to take a cautious approach to digital currencies, focusing on consumer protection.
This week, Japanese Prime Minister Shigeru Ishiba revealed that the Asian country would not Integrate Bitcoin into your reserves Despite its growing global popularity. According to him, digital assets such as Bitcoin They are inconsistent with the goals of the country's financial reserve strategy due to their high fluctuations.
Japan has It has been reported It has maintained a strict stance on exchange-traded funds (ETFs) even as these products are enjoying unprecedented success in markets such as the US.
Despite this cautious stance, the country has positioned itself as a digital asset-friendly country. Recent efforts include a turning point Economic stimulus package It includes amendments to the country's crypto tax laws.
