FATF Is Preparing, While Japan Checks Crypto Exchanges

For the preparation for inspection of the Financial Action Task Force (FATF) this fall, the Financial Services Agency (FSA) of Japan is investigating crypto exchanges. The FSA is inspecting any anonymous transactions or weak identity verification practices in crypto exchanges. Also, on May 22, the Nikkei Asian Review reported its development.

To check the strength of the Japanese FSA’s anti-money laundering (AML) policies, the FATF will send its investigatory arm. FSA’s AML policies include a system for crypto exchanges and other financial services.

Then in a FATF report in 2008, Japan received the worst score ever given for identity verification in financial institutions. After a decade, the Japanese FSA released business improvement orders to methods that did not have suitable AML measures. They improved practices like enabling users to sign up their accounts with the PO box. The box is a substitute for the user’s personal home address.

In addition to that, Japan is the first country to impose a registration system for cryptocurrency exchanges.

And in October, the FATF improved its policies. It added crypto exchanges in its AML regulatory framework and implored G-7 member countries to begin implementing strategies for registration, licensing, and monitoring crypto exchanges.

Previously in January, Japan’s FSA showed seven pending applications for crypto exchange licenses in the country. And these applications are reviewed for six months. It will take that long as the financial organization analyzes responses of applicants to more than 400 questions.

South Korea’s Blockchain Regulations

Meanwhile, the South Korean Ministry of Science and ICT is going to operate a follow-up study on blockchain regulations.

The “Blockchain Regulation Improvement Study Group” is part of an initiative run of the government’s science and tech arm.

And this June, Japan will host the Summit on Financial Markets and the World Economy (G20 2019) held in Osaka. The meeting will tackle the forum on international crypto regulations and initial coin offerings (ICOs). Besides, Japan has not announced anything about a national ban on ICO, unlike China and South Korea.