Japan’s Financial Services Agency (FSA) has reportedly quadrupled the number of questions it asks cryptocurrency exchanges during its registration screening process, according to reports from The Japan Times. The FSA is now also requiring those applicants to provide board meeting minutes to confirm that company officials have discussed issues like company finances and computer security.
The Times cited unnamed sources who said that applicant screening now requires exchanges to respond to roughly 400 questions. The report noted that questioning has been expanded from issues like financial health and systems security to a broader assessment of each company’s decision-making process:
The agency now intends to assess whether company executives are properly involved in decision-making by perusing the records of board meetings, the sources said.
In addition, the expanded screening includes a regular review of “the composition of an applicant company’s shareholders” – and regulators will be looking for confirmation that each company has some sort of internal system to help it identify “links to antisocial groups.”
The tighter screening requirements were apparently prompted by the agency’s previous on-site inspection, which found glaring deficiencies at many of the nation’s cryptocurrency exchanges. Those deficiencies included ineffective internal controls and a failure to keep proper minutes at company board meetings.
