While advocating for more regulations for the crypto sector in Japan, the Japanese financial regulators have also called to regulate cryptocurrency in the same manner as banking.
Mamoru Yanase, the deputy director-general of the Strategy Development and Management Bureau of the Financial Services Agency, believes that effective regulation should not only be applied to traditional finance but also the crypto space.
Yanase, in contrast to some of his American peers, stated that the main issue of the FTX case was not cryptocurrency itself. FSA deputy, as cited by Bloomberg, said the following:
“It’s not crypto technology itself that’s caused the recent debacle; it’s lax internal controls, loose governance, the lack of legislation and supervision.”
Mamoru Yanase, the deputy director of the Japanese FSA
Yanase continued, saying that governments must demand that cryptocurrency exchanges take steps to protect consumers firmly. The same rules should apply to crypto brokerages, including strong governance, internal controls, auditing, and disclosure.
FTX case in Japan
The collapse of FTX and accusations of fraud against Sam Bankman-Fried have devastated the cryptocurrency market and drawn attention to inconsistencies and discrepancies in the international regulation of digital assets.
However, Japanese Investors with a stake in the collapsed FTX exchange were shielded by existing Japanese laws and will soon be allowed to withdraw their money from FTX’s local affiliate.
The FTX case’s trial court approved the sale of FTX Japan and other corporate subsidiaries. 41 parties were reportedly interested in purchasing them.
On Jan. 16, Monex CEO Oki Matsumoto stated that the company was interested in purchasing FTX Japan and added that less competition in the local market would be excellent for them.
At the end of the third quarter of 2022, FTX Japan had cash and deposits totaling around $139 million and 17.8 billion yen. The subsidiary also stated that it had net assets of around 10 billion yen as of September. Beginning in February, the company plans to let clients whose money has been withheld withdraw it.