Japan’s Financial Services Authority (FSA) will improve internal audit processes at financial institutions, especially for cryptocurrency exchanges. This plan seeks to close gaps in the industry and bring Japan’s rules in line with global standards.
The FSA will hold a roundtable discussion with important stakeholders, including members from the Japan Cryptocurrency Exchange Association and other financial groups, to find ways to enhance internal audits in the financial sector.
The action follows a recent FSA report that found problems in audit practices at financial firms. The FSA plans to update its guidelines to include stronger auditing measures that align with global regulatory trends. This is part of a larger effort to make sure the financial system follows the rules and stays trustworthy.
The FSA has sent warning letters to five crypto exchanges: Bitcastle LLC, Bitget Limited, Bybit Fintech Limited, KuCoin, and MEXC Global, for operating without proper registration.
In Japan, exchanges that serve local customers must register with the FSA or a financial bureau. The regulator is worried about unregistered exchanges, pointing out possible risks to customer asset safety and platform security.
Japan is being careful with cryptocurrency rules. Prime Minister Shigeru Ishiba recently said that the country won’t add Bitcoin to its reserves because it’s too unstable.
Even with a cautious approach, Japan is still promoting a friendly environment for digital assets, as shown by a recent economic stimulus package that includes changes to crypto tax laws. These changes show that Japan is dedicated to protecting consumers as it adapts to the changing world of digital assets.
