According to reports, Japan has pushed other nations, including the U.S., to regulate cryptocurrency exchanges the same way they do banks.
According to a senior official at the Financial Services Agency, “loose governance, insufficient internal controls, and the absence of regulation and supervision” were to blame for the recent FTX implosion rather than crypto technology.
Bloomberg reported on Monday that Japan’s Financial Services Agency (FSA), the nation’s top financial regulator, has encouraged regulators worldwide to subject cryptocurrency exchanges to bank-level restrictions.
The current scandal has nothing to do with cryptography per se. It is the absence of regulation and supervision, lax internal controls, and loose governance.
Yanase claims that the FSA has “begun to press” its counterparts in the U.S., Europe, and other nations to regulate cryptocurrency exchanges similarly to how banks and brokerages are regulated.
Yanase emphasized the significance of obtaining global regulatory uniformity, noting that nations may need to set up a transnational resolution mechanism to cooperate when significant crypto businesses collapse.
The FSA official made clear that nations “ought to forcefully demand” actions from cryptocurrency exchanges in order to protect consumers, prevent money laundering, and develop effective internal controls, governance, auditing, and disclosures.
In order to make sure that cryptocurrency firms are properly handling their clients’ funds, he continued, regulators should also have the power to take enforcement steps, such as onsite inspections.