Following the FTX crash, financial regulators in Japan have encouraged international regulators to approach cryptocurrency in the same manner that they regard banks, pushing for more strict regulations for the industry.
The deputy director-general of the Financial Services Agency’s Strategy Development and Management Bureau, Mamoru Yanase, stated “Crypto has become this big. If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions.”
According to a Bloomberg report, Yanase remarked that through the Financial Stability Board, a worldwide organization focused on global regulation of crypto asset activity, Japan has been making its views represented.
Yanase stated while citing the FTX implosion, “What’s brought about the latest scandal isn’t crypto technology itself. It is loose governance, lax internal controls, and the absence of regulation and supervision.”
According to Yanase, the Japanese regulator has started to push its counterparts in the US, Europe, and other countries to regulate cryptocurrency exchanges similarly to how banks and brokerages are regulated.
In addition to having solid governance, internal controls, auditing, and disclosure, countries need to forcefully demand from cryptocurrency exchanges measures to safeguard consumers and prevent money laundering, Yanase said.
In order to ensure that these businesses are correctly managing their clients’ assets utilizing offline wallets, officials should also be authorized to take supervisory actions, such as conducting on-site inspections of these businesses, he said.
Yanase made the remarks while reiterating that withdrawals are anticipated to start again in February at the FTX subsidiary in Japan.
The “client’s assets have been properly segregated,” stated Yanase, adding, “We have been in close communication with FTX Japan.”
Monex is interested in buying FTX Japan, according to Monex CEO Oki Matsumoto, who also said that having fewer competitors in the local market would be great for the company.
FTX Japan has cash and deposits of around $139 million (17.8 billion yen) at the end of the third quarter of 2022.
