Japan’s Financial Services Agency (FSA) intends to closely monitor the nation’s digital currency exchanges, starting in October. According to a report in the Japan Times, the agency will be engaged in “full surveillance” of those exchanges to confirm that they have the proper systems in place to safeguard their customers’ assets. The FSA may also perform “on-site inspections” to ensure regulatory compliance.
Thanks to recent changes in Japan’s payment services law, cryptocurrency exchanges have until the end of this month to register with the government. Those exchanges must also implement systems to ensure separation between their assets and their customers’ funds. In addition, exchanges operating within Japan are required to implement risk management safeguards to protect against threats like cyberattacks.
To carry out the monitoring, the agency has created a surveillance team comprised of 30 FSA and finance bureau experts. FSA representatives have stressed that the surveillance and any potential enforcement measures are designed to provide guidance and standards for the emerging crypto industry. The Japan Times quoted one agency official who noted that the FSA pursues “both market fostering and regulation enforcement to ensure "sound market development.”