The Financial Action Task Force (FATF) is scheduled to inspect various safeguard measures adopted by Japan against money laundering practices this fall. Ahead of this inspection, the regulatory authority in the country, Financial Service Agency (FSA) has started a crackdown on various financial institutions including many cryptocurrency exchanges which it has found are not aligned with the measures prescribed by it. The prime objective behind the FATF’s inspection is to strengthen the anti-money laundering practices among the Financial Institutions. This policy includes the various frameworks that the agency has suggested for the crypto exchanges and other financial Institutions.
The investigatory agency of FATF is going to visit Japan in order to review what steps the country has taken in order to curb the menace of money laundering especially with respect to cryptocurrency exchanges which deal in trading of digital coins. Just so you know, in 2008 Japan received worst ever ranking from the FATF which found the country to be lacking in adopting safeguards to act against vested interest in financial practices. However, the situation has changed since then and now a decade later, the country is in a far better position to establish credentials on the parameters of money laundering or any other illegal practices. In a series of measures taken by FSA, the agency dictated the various rules to the financial institutions and asked them to improve upon various practices including asking the users to sign account through PO Box rather than their home computer.
Japan and Crypto Business
Japan has taken cryptocurrency exchange business very seriously, and in fact, it is the first country in the world which has first started registration procedure for the exchanges. In October last year, FATF came up with a number of changes in the procedural requirement for the cryptocurrency exchanges and asked the various Nation including G7 countries to use the newly issued guidelines for the procedures involved in the registration and monitoring of the businesses related to cryptocurrencies.
Also, what makes this recent development even more important is the fact that Japan is going to host an international summit on the World Economy and Financial Market in the coming month of June. The country is expected to speak at length about the various cryptocurrency regulations it has adopted and what changes are required in order to make transactions safer and secure than before. There will be deliberations on the initial coin offerings (ICOs) too, which will expand the horizon of the discussion and help to drive home a greater understanding of the digital asset. Japan has emerged as an attractive destination for cryptocurrency exchanges, and according to the news report, as many as seven applications for opening the crypto exchanges in the country are still under process. In order to get approval, applicants have to give satisfactory reply for more than 400 questions that the regulatory agency asks and it takes around 6 months to get the application process and get a response from the regulator.