Japan’s financial watchdog, the Financial Services Agency (FSA) said on Wednesday it is creating a new division to monitor financial technology (fintech) transactions, particularly developments in the cryptocurrency market and anti-money laundering activities.
The creation of the Strategy Development and Management Bureau (SDMB) came a year after the FSA said it would shutter its Inspection Bureau (IB) which was set up in the late 1990s in response to the global financial crisis.
Тhe new division will replace the IB adding new functions and performing most of its existing activities. The SDMB is now in charge of on-site inspections at financial services institutions to monitor illegal transactions. IB was created to perform a wide range of functions within the financial services and to promote transparency in the financial services sector.
The Japanese digital currency markets and the financial services industry are expected to welcome the latest move by the FSA because it would provide a greater level of accountability in the sector.
It is noted that the domestic cryptocurrency space is attracting more institutional and regulatory recognition over the past few months.
In a recent article published by the ACCJ Journal, the official newsletter of the American Chamber of Commerce in Japan, it noted a massive improvement in Japan’s regulatory regime involving blockchain and cryptocurrency immediately after the Mt. Gox heist of some 850,000 Bitcoins (then valued at $450 million in total).
Mineyuki Fukuda, a former lawmaker from the ruling Liberal Democratic Party and a founding member of the Japan Blockchain Association (JBA), said that prior to the Mt. Gox heist in 2014, "there were no regulations covering blockchain and cryptocurrencies". But now regulators are focused in consumer protection in the crypto space.
Last month, the FSA issued business improvement orders to five licensed digital currency exchanges operating in the country, ordering them to fix a number of issues in their internal systems.
Upon inspection, the FSA found bitFlyer, BitBank, Quoine, BITPoint Japan, and BtcBox – had gaps in their internal management systems, particularly in their anti-money laundering measures.
This article appeared first on Cryptovest
