Japan’s FSA pushes for stronger internal audits in crypto exchanges

The Financial Services Agency has published its 2024 monitoring report, calling for better internal controls and closer scrutiny of crypto exchanges.

Japan’s financial regulator has called for stronger internal controls across the entire financial sector, highlighting the need for better oversight for crypto exchanges in particular.

The Financial Services Agency said in a Dec. 26 press release that it plans to introduce new supervisory measures to align with international trends by updating its “Current Situation and Issues” guidance. As part of its efforts to improve auditing standards, the FSA will also hold a “Roundtable on Improving Internal Controls in Financial Institutions” in late January 2025.

In the press release, the FSA announced that the roundtable will be attended by representatives from the banking industry and the Japan Cryptocurrency Exchange Association, whose members include bitFlyer and Coincheck. However, no further details were shared.

The latest attempt comes shortly after Japanese police announced that hackers affiliated with the North Korean regime were likely behind a $307 million attack on Japanese crypto exchange DMM Bitcoin.

The Federal Bureau of Investigation and the Japan National Police Agency revealed in a Dec. 23 press release that the attack, which occurred in May, was linked to North Korean cyber actors and the threat group also known as TraderTraitor. Jade Sleet as UNC4899 and Slow Pisces.