A prominent Japanese crypto exchange, BitFlyer has been criticized by the FSA for lacking proper know-your-customer and anti-money laundering rules. In response, BitFlyer is introducing a new set of KYC rules that will get into effect on April 26, 2018.
FSA raises concern over BitFlyer’s KYC and AML measures
One of the biggest exchanges in Japan, BitFlyer has come under the scrutiny of Japan’s Financial Services Agency (FSA). The Tokyo-based exchange apparently made it easy for the digital currency users to buy and sell their cryptos without confirming their identity.
The Japanese watchdog has been going rough on the domestic exchanges after the major hack of Coincheck exchange. FSA has been repeatedly issuing warnings regarding complying with the business registration and money laundering rules and have recently taken to even shutting some down.
As per the local media source, in the light of concern that the cryptocurrencies can be used for money laundering via the exchange initiated FSA to call for the review of the exchange’s transaction form. Now, FSA has raised concerns over the exchange’s platform regarding its weak identification verification process.
Reportedly, the cryptocurrency exchange allows its users to start trading as soon as they submit a copy of their ID cards. This is before even the platform confirm or verify the information of the user. This certainly troubled the authorities regarding the propensity of the platform to be used for money laundering activities.
BitFlyer announces KYC/AML compliance rules effective from April 26
After being criticized by the FSA, now BitFlyer has announced that it will further make its KYC process strict in order to follow the registration and anti-money laundering regulations of the financial authority.
As per the announcement made by the exchange, its users won’t be able to send their cryptocurrency assets or withdraw fiat currency i.e. Japanese yen from their accounts just by registering online. From April 26, 2018, the BitFlyer users will have to get their identity and address confirmed with a postal letter receipt from the exchange.
In a similar manner, users won’t be able to use bitcoin to purchase goods until they have received the confirmation letter for passing the verification process for the company.
With the way the FSA has been going tough on the domestic exchanges, just last month about five of exchanges were shut down by the financial watchdog and a few days back, two more exchanges were barred from operations, BitFlyer has also taken the brunt of the regulatory authority.
After coming under the investigation of FSA, it only makes sense that BitFlyer will undertake the required measures in order to keep operating their business or take the risk to get shut down.
Do you think FSA is being too strict on crypto exchanges? Who do you think will be the next exchange to make the appropriate corrections?
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Having a background in writing, I worked on a wide array of industry topics and have recently entered the world of Blockchain and Cryptocurrency.