Japan Scrutinizing Crypto Exchanges Ahead of G20 Summit

Japan’s financial watchdog is said to be inspecting crypto exchanges over anti-money laundering measures ahead of June's G20 meeting.

AccessTimeIconMay 23, 2019 at 1:30 p.m. UTC
Updated Sep 13, 2021 at 9:14 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Japan’s Financial Services Agency (FSA) is said to be scrutinizing cryptocurrency exchanges in the country to ensure anti-money laundering (AML) processes are in place.

A report from the Nikkei Asian Review on Wednesday, citing an unnamed FSA official, said that inspections are being carried out ahead of the G20 summit next month. The G20 – the international forum of which Japan holds the presidency for 2019 – is planning measures to crack down on money laundering using cryptocurrency and, hence, the country aims to ensure that it has its financial house in order, they said.

Adding to the pressure, global money-laundering watchdog, the Financial Action Task Force (FATF), will review Japan’s domestic money laundering laws this autumn – an investigation that will include cryptocurrency platforms.

Cryptocurrency exchanges are, therefore, being asked by the FSA to clearly explain what measures they are taking to prevent money laundering, such as verifying user IDs to prevent anonymous transactions.

Last month, cryptocurrency exchanges Huobi Japan and Fisco were reportedly investigated by the FSA to assess their customer protection and AML provisions.

The FSA official said in today's report:

"We'll continue with the on-site inspections, and we'll make sure everything is sound."

Japan is also trying to make improvements after receiving the FATF's lowest rating for customer identification processes at financial institutions in 2008, the official added.

The FATF published a draft document earlier this year, proposing a number of measures that national governments should adopt to more effectively supervise cryptocurrency transactions, and therefore lower money laundering risks.

Japan has already been making moves to tighten up the crypto industry. The nation passed a law in April 2017 that brought cryptocurrency exchanges under AML/know-your-customer (KYC) rules and mandated that such platforms must be licensed. The law also notably recognizes bitcoin as a legal method of payment.

Japanese flag image via Shutterstock 

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.