Japan's financial authority has unveiled the results of an on-site inspection at one of the crypto trading platforms.
After the visits, Japan's Financial Services Agency has realized the need for stricter requirements for crypto exchange applications. According to the reports, the potential platforms will be checked on-site at the start of the operational activities, and the regulator will monitor the performance of their business model. As FSA spokesperson commented, they have received hundreds of applications for consideration.
The FSA reported that the internal system management of crypto exchanges is well behind the market volumes which are booming now. Specifically, the available data showed that the digital coins on local platforms amounted to JPY 792.8 billion ($7.1 billion), which is 6-fold above y-o-y. The staff at the majority of exchanges is less than 20 people, or in the other words, one employee manages about JPY 3.3 billion (in terms of assets).
In addition, numerous problems were detected in business models, risk management, compliance with the regulation, etc. The authority is concerned about insufficient AML measures taken by some trading platforms. It also added that the deep reconsideration of the requirements for new exchanges must be made and they will remain focused on the investor's protection.