The Financial Services Agency (FSA), Japan’s primary financial regulator, has provided clarification regarding its stance on peer-to-peer (P2P) crypto transactions. In a letter dated February 14th, the FSA urged local banks to bolster user protection by halting transfers to crypto-asset exchanges if the sender’s name differs from the account name. This move, as highlighted by Cointelegraph, may impact P2P transfers, which typically involve different users on the sender and receiver ends.
Clarification from the FSA
In response to inquiries, the FSA emphasized that its recommendation does not target transactions between individuals. Instead, it aims to combat unlawful money transfers, particularly instances where individuals deposit cash from their bank accounts into crypto exchange accounts. For example, a fraudster might attempt to manipulate a victim into changing their name on the bank account to match the fraudster’s identity, facilitating deposits into a newly created crypto account. However, under the new guidelines, banks are advised to block suspicious transactions where the sender tries to alter their name to facilitate deposits into crypto platforms.
Implementation by Financial Institutions
The FSA noted that several financial institutions have already implemented these measures. Despite this, the agency has not received any reports of concrete cases raising concerns over crypto asset markets. It’s important to highlight that the FSA’s recommendations are not mandatory for all financial institutions, allowing banks to tailor measures based on their specific circumstances.
Proactive Measures in South Korea
Meanwhile, Japan’s neighbor, South Korea, is also taking proactive steps to combat crypto fraud. The country’s Financial Intelligence Unit plans to introduce a preemptive trading suspension system for suspicious transactions on platforms operating within South Korea. This system will freeze transactions even during the pre-investigation phase, strengthening regulatory oversight and deterring illicit activities in the crypto market.
