Japan’s Internal Affairs minister has refuted that she had any involvement in current FSA investigations into cryptocurrency exchanges.

The minister, Seiko Noda, was accused of meddling in investigations which are only authorized to be conducted by the country’s financial watchdog, Japan’s Financial Services Agency (FSA).

The current investigation is looking at a non-registered Toyko-based cryptocurrency exchange which had previously not responded to the FSA’s requests for future information about the exchanges business activities. It reported that if the company “did not respond by the deadline given, it would report the matter to investigate authorities and take necessary steps”.

The request by the FSA was followed a week later by a request by the minister for more information about the case while in the presence of a representative of the exchange in question. This lead to accusations that Noda was bringing pressure on the FSA in the process of conducting its information.

Noda claimed that this meeting was simply a matter of getting “an overall general account of cryptocurrency exchanges”, and explained that she had no business interests in the exchange and had no intention on putting any pressure on the FSA. The FSA’s response was that simply the presence of the minister at the meeting could be seen as applying pressure on due process. A senior FSA official 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.”

In her defense, the minister stated that it was her aide who actually presented at the meeting suggesting:

“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.”

This week, the FSA is undergoing a reshuffle in order to deal with regulatory issues underlying Japan’s financial sector. A Strategy Development and Management Bureau will now deal with issues connected with cryptocurrency, fintech and money laundering.

 

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