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Japan FSA to Augment Personnel to Deal with Growing Number of Crypto Exchange Applications

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The Financial Services Agency (FSA) of Japan bared its plans to boost its workforce by 12 personnel to handle the increasing influx of applications for crypto exchange licenses a lot better.

Reuters Japan reported this recently.

During a crypto exchange study group gathering last Wednesday, the FSA’s vice commissioner for policy coordination, Kiyotaka Sasaki, remarked that the agency is at the moment conducting its oversight of crypto exchanges with a team of an estimated 30 people, whose functions includes the evaluation of license applications.

Yet Sasaki emphasized that with over 160 firms awaiting review, the number of personnel is inadequate, saying the agency would need to supplement it with 12 persons in 2019 to deal with its “biggest problem” – the growing number of license applications.

According to a document published after the meeting, the FSA has been reviewing sixteen cases, twelve of which removed their application at the FSA’s request and one of which has been denied. Three, including Coincheck — which suffered the largest hack in crypto industry history earlier in the year — are waiting for a final decision.

The document further states that the agency plans to improve its risk profiling protocols as part of its “ongoing in-depth monitoring” of the exchange space, and to work a lot more closely with related ministries and groups vis-a-vis non-registered firms, both domestic and overseas.

The document underlines concerns over lacking anti-money laundering (AML) and terrorism financing prevention measures among exchanges, and also points out other concerns regarding business models, risk management and compliance, internal audits, and corporate governance.

As the aforementioned document stresses, most exchanges’ system personnel are less than 20 people, meaning that one employee on average was found to be managing digital assets worth 3.3 billion yen ($29.6 million).

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