Japan's Financial Services Agency Raises Concerns Over 'Sales Platform' Trading Models

Japan's Financial Services Agency (FSA) has raised concerns over cryptocurrency businesses potentially guiding users toward 'sales platform' models, which are reportedly more profitable for operators than traditional exchange models. The FSA stated it will examine whether trading interface designs and guidance could encourage unfavorable choices for customers.

According to CoinPost on July 17 (local time), the FSA disclosed in a published document that during a discussion with the Japan Cryptocurrency Exchange Association on July 15, they addressed this issue. The Financial Services Agency's Advisory Council had previously highlighted potential conflicts of interest, noting that sales platform trading could yield higher profits for businesses.

A sales platform involves operators acting as counterparties to customer trades and setting prices directly, whereas an exchange model connects user orders. The difference in pricing mechanisms and transaction costs makes it crucial for users to understand the distinction before choosing a service.

The FSA emphasized that businesses must act with due care and fairness under legal obligations to prioritize customers' best interests. It plans to continue discussions with operators regarding trading interfaces and customer journey flows, while also requesting industry self-regulation to ensure services align with user knowledge and experience levels. However, the agency clarified it has not confirmed any specific violations or banned sales platform operations.

Additionally, identity verification procedures will be strengthened. Starting April 1, 2027, face-to-face checks of photo-attached identification must use ID cards with IC chips that can be read to verify chip information. Cryptocurrency businesses are included in this requirement and must prepare the necessary systems.

The FSA also urged compliance with international anti-money laundering standards. Following requests from the Financial Action Task Force (FATF) to impose countermeasures against North Korea and Iran, and enhanced customer verification for Myanmar, the agency instructed the industry to strictly adhere to identity checks, suspicious transaction reporting, and mandatory notifications related to cryptocurrency transfers.