Is Japan’s Internal Affairs Minister meddling with FSA’s crypto probe?
The Internal Affairs Minister of Japan, Seiko Nodo, has recently denied her involvement in a government-led probe of a crypto exchange. As per the 19th July report of a local news media, Asahi Shimbun, the concerned cryptocurrency exchange is a non-registered one. According to a report by BCFocus, following Huobi, another prominent crypto exchange, namely, KuCoin has also stopped its trading in Japan.
In the first month of 2018, an organisation of Tokyo has been under the scanner of Financial Services Agency [FSA]. The company was suspected of legal violation for the operation of a crypto exchange that has no legal registration. However, the company failed to meet the deadline given by FSA. Following this, the latter sent a formal letter to the organisation explicitly stating, “it would report the matter to investigating authorities and take necessary steps.”
Asahi Shimbun got hold of an official document that unveiled a crucial fact related to the case. It was only after a considerable span of time that the office of Noda contacted the FSA. At this point of time, Noda’s office demanded an explanation from FSA of what exactly the matter was all about.
Hereafter, a meeting was organised involving the office of Noda along with FSA to deliberate on the alleged organisation. This discourse was held having the representative of the company present in the meeting. On being asked by Asahi Shimbun about the motive of the meeting, Noda replied that it was meant to have “an overall general account of cryptocurrency exchanges.” Noda also clarified to the local news outlet that she possessed, “no vested interest in the company in question.” She also presented the fact that the meeting, “obviously does not amount to exerting pressure.”
The report of Asahi Shimbun suggested that on 30th January the office of Noda was visited by an official of FSA. This visit was primarily intended to inform the office about the status of the agency pertaining to the fund raising norms. The fund was raised by the issuance of digital currencies to the assistant of Noda and the representative of the company. An FSA senior official in this respect stated, “A public servant will likely take it as pressure if an aide to a sitting Cabinet member calls for a meeting in which an employee of a company the agency is looking into is also present.”
However, she denied that the meeting was not organised to exert pressure on the agency. Noda finally admitted that at the discussion her aide was present and commented, stating,“My aide and the employee of the company know each other. Since we received a request for details of the regulations concerning cryptocurrency exchanges, we arranged [for a meeting with the agency]. I was not aware of the agency’s warning against the company.”
The government of Japan has made a recent announcement regarding the revamp of the FSA to increase its efficacy. This measure would help to prepare and improve the agency in addressing issues concerning regulatory norms. Recently, Inspection Bureau is substituted by Strategy Development and Management Bureau. In future, it plans to frame policies of financial strategy and manage issues related to fintech, money laundering and crypto market.
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