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Japanese regulators want crypto to be treated like traditional banks

17.01.2023

Published by Appelink

The Japanese Financial Services Agency (FSA) announced plans to treat crypto asset exchanges similarly to transactions from traditional banks. This move is set to put crypto markets under greater supervision and stricter regulation. The FSA will require crypto exchanges to establish systems for compliance and to adhere to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. Additionally, the exchanges are required to submit detailed monthly reports to the FSA about their financials.

The reason for these calls is the collapse of FTX in November, which is still affecting the industry and triggered urgent action. The FSA is taking a step due to concerns about protecting customer funds and ensuring the integrity of financial assets. As crypto is becoming increasingly popular, the FSA is working to ensure the safety of customer funds and protect investors from fraudulent activities.

Another key reason for this move is to combat the use of crypto in criminal activities. This is a growing concern in Japan as more criminals have been turning to crypto as a means of money laundering. The FSA wants to ensure that all crypto exchanges are following proper regulations so that they can detect any suspicious activity quickly.

Ultimately, this change is a step towards increasing the legitimacy of the crypto industry in Japan. Treating crypto exchanges similarly to traditional banks could help boost customer confidence and trust in the industry. This could potentially attract more investors and users to the space, which could lead to further growth and innovation. Only time will tell how the FSA’s move impacts the crypto industry. However, it appears to be an encouraging sign of increased legitimacy for the sector in Japan.

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