Financial Services Agency Expresses Concerns Over 'Sales Offices' for Cryptocurrency

Key Points of This Article

• Customer-oriented business operation obligation implemented in November 2024
• Mandatory IC by April 2027; FATF request issued in April

Concerns Over 'Sales Offices'

According to materials released by the Financial Services Agency (FSA) on the 17th, the agency expressed concerns during a meeting with the Japan Virtual Currency Exchange Association on July 15 that some cryptocurrency exchange operators might be guiding users towards the more profitable sales office format rather than the exchange format. This concern is based on points raised in the report from the Financial Council's "Working Group on Cryptocurrency Systems."

For businesses that offer both sales offices and exchanges, the fee structure and price formation mechanisms differ depending on which option customers choose. The FSA indicated its intention to continue discussions with operators regarding UI pathways, based on the obligation to "conduct business in good faith and fairly, considering the best interests of customers," which was introduced in the amended Financial Services Provision Act that came into effect in November 2024. Additionally, the agency sought discussions on the appropriateness of the conformity principles in the development of self-regulatory rules.

Mandatory IC Chips for Identity Verification

During the meeting, there was also mention of the revised regulations for the Prevention of Transfer of Criminal Proceeds Act, which will come into effect on March 6, 2026. The current verification method, which requires the presentation of photo identification in person, will be limited to documents with IC chips, and reading the information from these IC chips will be mandatory, with other verification methods generally abolished. Similar to the amendments regarding non-face-to-face verification methods set for June 2025, the enforcement date is April 1, 2027.

Cryptocurrency exchange operators are included among the businesses subject to the Prevention of Transfer of Criminal Proceeds Act. The FSA urged financial institutions to steadily prepare for enforcement, including system responses related to the identity verification flow during account openings.

FATF Countermeasures for Iran

On the international front, the statement adopted by the Financial Action Task Force (FATF) during its plenary meeting from February 11 to 13, 2026, was also discussed. This statement identified North Korea and Iran as countries/regions where countermeasures are required, and Myanmar as a country/region where strict customer management measures are requested based on risk. For Iran, additional countermeasures were introduced, including a ban on establishing branches of cryptocurrency service providers and a prohibition on forming new correspondent relationships.

In response, relevant ministries, including the FSA, issued a request document to related financial institutions and associations on April 13, 2026, demanding strict compliance with obligations regarding transaction verification, reporting suspicious transactions, and notification obligations related to the transfer of cryptocurrencies. The Japan Virtual Currency Exchange Association has also been requested to ensure thorough dissemination to its member companies.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.