Japan Tightens Risk Screening Process for Crypto Exchanges
The Financial Services Agency (FSA), Japan’s financial regulator, will make the process of registration screening for cryptocurrency exchanges more strict, according to local media outlet the Japan Times.
The FSA has revised the Payment Services Act, implemented in April 2017, “to see whether crypto exchanges are properly conducting risk management.” The financial regulator has added several features to the previous act’s legislation, increasing the number of questions asked when screening applications to nearly 400 items.
The FSA also will require access to crypto exchanges’ board meeting records and to descriptions of companies' shareholder composition. The review of board meeting records is needed to “check whether enough discussions have been held about measures to sustain the company’s financial health and ensure the security of its computer system.”
Despite tightening regulations, Japan’s financial institutions are looking into crypto market development. Toshihide Endo, the FSA commissioner, told Reuters that the agency’s goal for developing the crypto industry is to allow it to “grow under appropriate regulation.”