Japan’s main financial regulatory body, the Financial Services Agency (FSA), has issued recommendations to domestic banks on peer-to-peer (P2P) crypto transactions.
The FSA has urged banks to enhance user protection by halting transfers to crypto exchange service providers in cases where the sender’s name differs from the account name. The decision could potentially jeopardize P2P transfers within the country, as they typically involve distinct users at both the sending and receiving ends.
The FSA clarified that its recommendation 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.”
Numerous financial institutions have already implemented these measures, according to the FSA. However, the agency has not received any reports of specific cases that would raise concerns regarding crypto markets.
Meanwhile, the watchdog’s recommendations are not universally mandated for all financial institutions. Banks are encouraged to assess each scenario and determine appropriate measures accordingly.
South Korea, is initiating similar proactive measures to address crypto fraud. The Financial Intelligence Unit will implement a preemptive trading suspension system for suspicious transactions occurring on platforms currently operational within the country. This system will effectively freeze transactions, even during the preliminary investigation phase.
