Japan FSA urges crypto exchanges to end ID photo verification early

Japan’s Financial Services Agency on Oct. 9 urged financial institutions, including cryptocurrency exchanges, to phase out identity verification based on submitted ID photos before the current April 1, 2027 deadline and switch to reading data from IC chips embedded in identification cards. The move follows a series of unauthorized access incidents and customer data leaks at financial institutions. Under the new method, institutions would verify users by reading information stored on an ID card’s IC chip through a smartphone or similar device, including a name, address, date of birth, and facial photo. The agency also called for checks on risk management related to outsourced service providers and on response systems for cyberattacks.