The financial services agency of Japan (FSA), basing on the results of inspections of local crypto-exchanges, has concluded that it is necessary to tighten requirements for new trading platforms.

In particular, the report states the need to tighten the requirements for cryptocurrency exchanges wishing to obtain a license for conducting operations. The FSA will carry out on-site inspections of such companies, as well as scrutinize effectiveness of their business models. According to the agency, currently hundreds of companies are waiting their applications to be considered.

The agency also concluded that the development of exchange infrastructure and the effectiveness of their internal control systems do not keep up with the rapid growth of the volume of transactions and the dynamics of the market as a whole. According to the FSA, the total value of digital assets of local exchanges reached 792.8 billion yen ($7.1 billion). In general, over the past year, this figure has increased 6 times. At the same time, the number of personnel at most trading platforms does not exceed 20 people. Thus, on average, one employee accounts for digital assets worth $ 3.3 billion yen ($29.7 million).

The regulator also identified some problems related to the peculiarities of exchanges’ business models, focusing on risk management and compliance, internal audit systems and corporate governance. The FSA also expressed concern about the lack of measures to combat money laundering (AML).