In a recent move to fortify the financial sector, Japan’s Financial Services Agency (FSA) has released its 2024 monitoring report. The report emphasizes the need for enhanced internal audits and more meticulous scrutiny, particularly when it comes to crypto exchanges.
The FSA, Japan’s financial regulator, has called for a comprehensive upgrade of internal audits across the entire financial landscape. This initiative underscores the importance of better oversight, with crypto exchanges being a key area of focus.
In a press release on December 26, the FSA announced its plan to update the “Current Situation and Issues” guidelines. This update aims to introduce new auditing measures that are in line with international trends. As part of this effort to raise audit standards, the FSA will host a “Roundtable on the Improvement of Internal Audits at Financial Institutions” in late January 2025.
The press release further disclosed that representatives from the banking sector and the Japan Cryptocurrency Exchange Association, which counts bitFlyer and Coincheck among its members, will participate in the roundtable. However, no additional details were provided.
This latest initiative follows closely on the heels of a significant revelation by the Japanese police. On December 23, the Federal Bureau of Investigation, in collaboration with Japan’s National Police Agency, announced that hackers affiliated with the North Korean regime are likely responsible for the $307 million attack on the Japanese crypto exchange DMM Bitcoin.
The attack, which took place in May, has been linked to the threat group known as TraderTraitor, also recognized by aliases such as Jade Sleet, UNC4899, and Slow Pisces.
This series of events highlights the growing concerns regarding the security and regulatory compliance of the crypto industry in Japan, and the FSA’s determination to address these issues through strengthened internal audits and regulatory measures.
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