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Japan’s FSA Tightens Regulations on P2P Crypto Transactions Amid Fraud Concerns

The Financial Services Agency (FSA) – Japan’s primary financial regulator – has elucidated its stance on peer-to-peer (P2P) crypto transactions following its latest directives to local banks.

In its missive on 14th February, the FSA urged banks to “further bolster their user protection” by “halting transfers to crypto-asset exchange service providers if the sender’s name differs from the account name.”

As previously reported by Cointelegraph, this could impede P2P transfers in the nation as they typically involve distinct users at the sending and receiving ends.

Responding to a query from Cointelegraph, the FSA clarified that its directive does not encompass “transactions from one individual to another”:

“We issued the request with the aim of asking banks and other financial institutions to strengthen measures against unlawful money transfers in cases where an individual deposits cash from the individual’s bank account to an account of a crypto asset exchange service provider.”

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According to the FSA, these measures have already been adopted by several financial institutions, although the agency has not received any reports of specific cases that would raise “concerns over crypto asset markets.”

The FSA’s recommendations “are not uniformly obligatory” for all financial institutions. Banks are expected to deliberate and determine specific measures based on their circumstances.

Japan’s neighbour, South Korea, is also taking proactive measures to combat crypto fraud.

Its Financial Intelligence Unit will introduce a pre-emptive trading suspension system for suspicious transactions on platforms already operating in the country.

This will halt transactions even during the pre-investigation phase.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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