Japan’s Financial Services Agency is cracking down on cryptocurrency exchanges in the country, reports the Nikkei Asian Review. The crackdowns are taking place against those exchanges which have provisions for anonymous transactions or have a weak identity verification process.
This stepping up of actions is said to be a preparation for an inspection by the Financial Action Task Force, this fall. The steps are not only aimed towards crypto exchanges but also at banks and other traditional financial institutions which offer financial services with less stringent identity verification measures.
The Global Risk Perception and Regulation Drive
The cryptocurrencies have been found to offer a lot of convenience to its users as a financial tool, as a means of exchange, and even as a store of value. However, it is also thought to pose threats to financial and economic orders, along with the danger of being used as a source of terror funding and illegitimate arms, like in the North Korean case, and thus a threat to global peace.
Therefore, ahead of the G-20 summit, Japan wants to ensure that its anti-money laundering laws are in place, and are well implemented in case of crypto exchanges, says the Asian Review report.
The Present Regulations in Japan
The last Financial Action Task Force report had singled out Japan in terms of having an inadequate legal framework in 2008. In October 2018, the Anti Money Laundering laws of Financial Action Task Force included cryptocurrencies. In June 2018, the Financial Services Agency had issued business improvement orders to crypto exchanges for improving their identity verification system. This was seen as a response to the hacking attack worth 54 billion Yen on Coincheck. The Japanese authorities seem to be feeling the need for complying with the global standards of anti-money laundering laws for cryptocurrencies. In fact, the global standardization of such norms is becoming a necessity to even the distribution of the crypto sector developments around the world.