Japanese financial regulators have urged global regulators to treat cryptocurrencies like banking and called for tougher regulations for the industry. According to Mamoru Yanase, Deputy Director General for Strategic Development and Authority of the Financial Services Agency, cryptocurrencies need to be controlled.
“If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions,” he said.
Japan’s financial regulator’s comments follow November’s FTX crash, which rocked the industry and prompted the urgency for regulatory action. Unlike some of his American peers, Yanase admits that the problem isn’t with crypto. “It wasn’t crypto itself that caused the recent scandal,” he said, adding that “loose governance, lax internal controls, and a lack of regulation and oversight” are to blame.
He urged regulators in the US and Europe to enforce the same rules on cryptocurrency exchanges as banks and brokerages. The recommendations were made by the Financial Stability Board, the global organization responsible for regulating the digital asset industry.
Yanase added that countries must “insist” on consumer protection through cryptocurrency exchanges. Anti-money laundering, strong governance, internal controls, audits and disclosures are also required for crypto brokers
FTX Japan to Resume Operations
Yanase made these comments while also confirming that FTX’s Japanese subsidiary is expected to resume withdrawals from February.
The U.S. court presiding over the FTX case agreed to the sale of FTX Japan, among other company subsidiaries. Last week, there were 41 parties interested in buying the Japanese branch of the exchange. On Jan. 16, Monex CEO Oki Matsumoto said that they were interested in buying FTX Japan, adding that it would be a very good thing” for the financial services company if there was less competition within the local market.