Financial Services Agency Requests Acceleration of IC Chip Reading Due to Document Image Leak, Including Cryptocurrency Exchanges

Key Points of This Article

• Abolishment of document image transmission method scheduled for April 2027
• Cryptocurrency exchanges also requested to accelerate transition to IC chip reading under cyber guidelines for "financial institutions"

On the 9th, the Financial Services Agency (FSA) issued a warning to financial institutions regarding the need to strengthen cybersecurity measures and tighten non-face-to-face identity verification. They are urging a swift transition to reading IC chip information without waiting for the abolishment of the document image transmission method scheduled for April 1, 2027.

The background of this request stems from the ongoing incidents of unauthorized access to customer-facing services and business systems published on the internet. There have been cases of customer information, including images of identification documents such as driver's licenses, being leaked, and the FSA pointed out that the methods of impersonation are becoming more sophisticated.

The government as a whole is also progressing in its response. The National Cybersecurity Center of the Cabinet Secretariat held a meeting of relevant ministries on the 8th, where Minister of Cybersecurity Toshiharu Furukawa expressed the need for businesses to strengthen their measures. On the 9th, the center issued a warning based on incidents of leaks due to unauthorized access.

The FSA's request consists of three points. The first point is to inspect cybersecurity measures, including risk management of external contractors and response systems in the event of incidents. The second point requests a re-examination of whether there are any unnatural points in document images or facial images used for non-face-to-face identity verification. The third point pertains to the amendment of the enforcement regulations of the Act on Prevention of Transfer of Criminal Proceeds (the Anti-Money Laundering Act), where the FSA positions IC chip reading as "extremely effective" against fraud and encourages measures before the enforcement date.

Impact on Cryptocurrency Exchanges

This document is addressed only to "financial institutions" without specifying individual business types. However, the underlying "Guidelines on Cybersecurity in the Financial Sector" formulated in October 2024 includes cryptocurrency exchanges as "financial institutions" alongside banks and insurance companies. Exchanges are also designated as specific businesses under the Anti-Money Laundering Act, and transaction verification is mandatory at the time of account opening.

After the enforcement of the amended regulations, the method of sending images of identification documents and facial photos taken with smartphones will no longer be usable. Exchanges that accept account openings using this method will need to switch to reading IC chip information from My Number cards.

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