FSA Orders Japanese Crypto Exchanges to Increase AML Efforts




Japan’s Financial Services Agency (FSA) ordered six of the country’s cryptocurrency exchanges to enhance their anti-money laundering processes, according to the Japan Times. The exchanges included bitFlyer, BitBank Inc., BITpoint Japan Co., BtcBox Co., Quione, and Tech Bureau Corp. FSA examinations reportedly found weaknesses in the internal controls those exchanges use to verify customer identities.

The order came amid heightened regulatory scrutiny of exchange activities in recent months. As part of its exchange registration efforts, the FSA conducted on-site inspections of exchange operations to verify compliance with KYC and AML requirements. That increased scrutiny has resulted in a variety of enforcement actions that ordered similar process changes at seven exchanges. Two exchanges were reportedly ordered to suspend operations for a month.

In response to the latest FSA order, bitFlyer announced that it would suspend new account creation while it works to enhance internal controls that prevent terror financing and money laundering. A message on the company’s website noted that the suspension was limited to its Japanese operations:

“On June 22nd, 2018, bitFlyer, Inc. (Japan) received business improvement orders from the Japanese Financial Services Agency. Our management and all employees are united in our understanding of how serious these issues are. In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have voluntarily and temporarily suspended the onboarding of new customers. We appreciate your understanding. This order is directed to bitFlyer Inc. (Japan) and not to its USA or European entities, which are regulated in their own geographical jurisdictions.”

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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