International Finance

Japan’s financial regulators to further inspect cryptocurrency exchanges

Financial Services Agency, cryptocurrency, Japan
Japan is leading the crypto space and several exchanges pose a threat to the overall economy

Financial Services Agency is said to carry out inspections on cryptocurrency exchanges this week.

A source close to the investigation told Reuters the inspection may expand its enquiry. Several operators will be subject to on-site inspection. The probe will take place based on conditions such as degree of vulnerability to cyber threats.

There are enough concerns for regulators whether exchanges are looking into the practice of separating customer funds and operating accounts as required.  

Director-General of payment and settlements, Hiromi Yamaoka, said, “There’s undoubtedly growing interest among global policymakers on how to deal with cryptocurrencies. Japan’s approach would be to think about how to curb excesses without discouraging innovation.

“So far, I don’t think there are any big problems. But we need to look carefully. If the exposures turn out to be huge, we may need to follow up and work to maintain financial stability together with the Financial Services Agency.”

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