Japan’s Financial Services Agency (FSA) has proposed new measures to strengthen user protection against illegal transactions with crypto exchange platforms, according to a February 14 recommendation to Japanese banks.
The directive emphasized the need for banks to proactively protect their users against the risks associated with ‘illegal fund transfers’ via ‘crypto assets’.
That is why the supervisor, in collaboration with the National Police Corps (NPA), has made two important recommendations to financial institutions. First, authorities have proposed halting transfers to crypto exchanges if the sender’s name differs from that of the account holder.
“Stopping transfers to crypto asset exchange service providers if the sender name is different from the account name.”
Second, authorities called for increased vigilance in monitoring suspicious transactions on crypto platforms.
“Transaction monitoring regarding transactions with crypto asset exchange companies, which are the exchange points between crypto assets and legal currencies, is an effective method to ensure the effectiveness of risk mitigation measures, so it is necessary to develop rules and scenarios for pattern analysis ”, writes the NPA.
The FSA went on to say that these measures would help curb the ongoing threat of specialist fraud cases, particularly those involving internet banking.
Meanwhile, this initiative follows recent developments in the country, which has a history of enforcing strict crypto regulations. Last December, the Japanese government introduced tax reforms to end the taxation of unrealized profits on digital assets owned by companies.
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