Japan’s FSA to Strengthen Audit Processes in Financial Institutions
Japan’s Financial Services Authority (FSA) is taking steps to enhance internal audit processes at financial institutions, including crypto exchanges. The agency aims to address industry gaps and align with global standards in regulatory compliance.
Roundtable Discussion to Improve Internal Audits
The FSA plans to hold a roundtable discussion to explore ways to improve internal audits in Japan’s financial sector. Key participants will include representatives from the Japan Cryptocurrency Exchange Association, Japan Financial Services Association, Japan Payment Services Association, and Japanese Bankers Association.
Enhanced Auditing Measures
Following a recent monitoring report highlighting weak audit and scrutiny practices among financial firms, the FSA intends to revise its guidelines to include enhanced auditing measures that reflect international regulatory trends.
Crackdown on Unregistered Exchanges
The FSA has issued warning letters to five crypto exchanges accused of operating without proper registration. These exchanges include Bitcastle LLC, Bitget Limited, Bybit Fintech Limited, KuCoin, and MEXC Global. Exchanges serving locals in Japan are required to register with the FSA or a financial bureau to ensure supervision and compliance with regulations.
Cautious Approach to Crypto
Japan continues to take a cautious approach to crypto and prioritize consumer protection. Despite the growing global acceptance of Bitcoin, Japan’s Prime Minister stated that the country will not integrate Bitcoin into its reserves due to its high volatility. Japan has also maintained strict regulations on crypto-related ETFs, while positioning itself as a digital asset-friendly nation through recent economic stimulus packages and reforms to crypto taxation laws.
