According to Mamoru Yanase, cryptocurrency need the same precautions as financial institutions and banks.
Japan’s financial regulators have encouraged global regulators to approach cryptocurrency in the same manner that they do banking, pushing for stricter regulations in the sector.
Mamoru Yanase, deputy director-general of the Financial Services Agency’s Strategy Development and Management Bureau, believes that cryptocurrency must be regulated.
“If you want to execute effective regulation, you have to do the same thing you do when you control and supervise traditional institutions,” he said, according to a Bloomberg article on Jan. 17.
The statements from Japan’s financial watchdog follow the collapse of FTX in November, which shook the industry and fueled calls for regulatory intervention.
Unlike some of his American peers, Yanase has admitted that the issue was not with crypto. “What has caused the newest controversy is not crypto technology itself,” he remarked, before adding, “it is loose governance, lax internal controls, and a lack of legislation and supervision.”
He stated that regulators in the United States and Europe have been encouraged to apply the same laws to cryptocurrency exchanges as they do to banks and brokerages.
The proposals were routed through the Financial Stability Board, a global entity responsible with overseeing the digital asset industry.
Yanase went on to say that countries “must strongly demand” consumer protection measures from cryptocurrency exchanges. For crypto brokerages, demands were also made for money laundering prevention, good governance, internal controls, audits, and disclosure.
Yanase made the remarks while stating that FTX’s Japanese business will restart withdrawals in February.
“We have been in close contact with FTX Japan,” Yanase said, adding that the “client’s assets have been properly isolated” from the subsidiary.
The FTX case’s presiding court agreed to the sale of FTX Japan and other corporate subsidiaries. Cointelegraph reported last week that 41 parties were interested in purchasing the exchange’s Japanese branch.
On January 16, Monex CEO Oki Matsumoto stated that the company was interested in purchasing FTX Japan, noting that reducing competition in the local market would be a “really good thing” for them.