The Financial Services Agency (FSA), Japan’s crypto market regulator, has issued a renewed warning to the Japan Virtual Currency Exchange Association (JVCEA). The warning is about the October full-scale implementation of FATF travel rules for crypto.
Local news outlet CoinPost reports that the FSA also criticized the management of the JVCEA. Furthermore, the financial market watchdog stated that it is dissatisfied with the JVCEA’s speed in rolling out anti-money laundering rules. The body is also dissatisfied with how the organization handles decision-making and communication, and how it handles delegating executive responsibilities.
In addition, the JVCEA has stated that it is working to meet up with the FSA’s standards. However, it still faces challenges.
For one, its efforts to introduce anti-money laundering rules for crypto exchange in Japan have been undermined by the cross-border nature of the crypto market. This has made reporting transactions difficult.
Masako Yamaga, a director of the JVCEA and a professor at Meiji University, made a remark. He stated that implementing the travel rules will require international collaboration. Similarly, he noted management and communication challenges come from not having enough manpower with experience in crypto-regulations.
Notably, this isn’t the first time the FSA is expressing its dissatisfaction with the JVCEA’s pace of rolling out regulations. Back in July, Financial Times reported that the JVCEA was in the middle of internal crisis. One that had the FSA bearing down on it.
At the time, the FSA emphasized the same concerns even as employees of the association sought to unionize. This was in a bid to oppose the JVCEA’s plans to downsize its employee headcount. The association had been struggling to keep running costs down as the crypto market entered bear territory globally.
Furthermore, amidst the tussle, the JVCEA has also successfully introduced some more lenient rule changes for exchanges. The association has put together a “Green–List” of cryptocurrencies that registered exchanges can list without rigorous processes of screening.
JVCEA Still Attracting Crypto Exchanges With Its Web 3.0 Policy
While JVCEA registered exchanges struggle to meet up with the FCA’s implementation of the FATF travel rules. Consequently, exchanges are looking to enter the Japanese market. Bloomberg reports that the global biggest crypto exchange by trading volume, Binance is making moves. The exchange platform is ,making moves to reopen in Japan after leaving four years ago.
Binance’s renewed attention is thanks to the new economic policy introduced by Japan’s Prime Minister Fumio Kishida. Furthermore, under this policy, the Japanese government has already set up a Web 3.0 Policy Office that will focus on promoting the adoption of Web 3.0-related innovations.
Elsewhere In Cryptocurrency
With cryptocurrency investors increasingly worried about Hong Kong’s regulatory ambiguity on crypto, a number of major crypto-focused businesses. And events have decided to move their activities to Singapore and other countries considered as more friendly to their industry.
Hong Kong’s lawmakers are advancing plans. Plans to require licensing for crypto trading platforms through an amendment to the city’s anti-money laundering legislation. This legislative change would require firms to offer such services exclusively to professional investors. Investors with a portfolio of at least HK$8 million (US$1 million). However, should the amendment go through, the move could discourage numerous crypto investors from conducting their business in Hong Kong.
“There was a point in time where Hong Kong had a leading position in cryptocurrency and business related to crypto,” Padraig Walsh, a partner at the Hong Kong law firm Tanner De Witt, told local daily.
The South China Morning Post. “That isn’t the case any more, and I think regulation has been a key part of the reasons why.”