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Financial regulators in Japan have urged global regulators to treat crypto the same way they treat banking, calling for tougher rules for the sector.

According to the Deputy Director General of the Strategy Development and Management Office of the Financial Services Agency, Mamoru Yanase, crypto must be controlled.

“If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions,” he said according to a January 17 Bloomberg. report.

The comments from Japan’s financial watchdog come in the wake of FTX’s collapse in November, which shook the industry and prompted urgency for regulatory action.

Unlike some of his American counterparts, Yanase acknowledged that the problem was not related to crypto. “What caused the latest scandal is not the crypto technology itself,” he said before adding “it’s loose governance, lax internal controls and lack of regulation and oversight. supervision”.

He said regulators in the US and Europe have been told to apply the same rules for crypto exchanges as they do for banks and brokerages.

The recommendations were pushed through the Financial Stability Boarda global organization responsible for regulating the digital asset industry.

Yanase added that countries “must strongly demand” consumer protection measures from crypto exchanges. Requirements have also been formulated for the prevention of money laundering, strong governance, internal controls, auditing and disclosure for crypto brokers.

Yanase made the comments while confirming that the Japanese subsidiary of FTX is expected to resume withdrawals from February.

“We have been in close communication with FTX Japan,” Yanase said, explaining that “client assets have been properly segregated” from the subsidiary.

Related: Approach with Caution: Crypto Warning from US Banking Regulator

The court presiding over the FTX case accepted the sale of FTX Japan among other subsidiaries of the company. Last week, Cointelegraph reported that there was 41 interested parties in buying the Japanese branch of the stock exchange.

On January 16, Monex CEO Oki Matsumoto said they were interested in buying FTX Japanadding that it would be a “very good thing” for them if there was less competition in the local market.