Compliance, Risk, and Background Screening in the Virtual Assets Industry: Insights from Jun Omune, CEO of FilterBank

The Virtual Assets (VA) market is growing fast, but it's not without its challenges, especially when it comes to keeping up with regulations, security risks, and finding the right people to hire. As the industry matures, building a solid foundation that’s secure, compliant, and ethical has never been more important.

To help make sense of it all, we sat down with Jun Omune from FilterBank, who shared his insights on Japan’s VA landscape, the major risks to watch, and why thorough background checks are essential when hiring in this space.

Jun Omune is the CEO of FilterBank, a market leader in Japan founded in 1986. The company envisions a society where decisions are guided by integrity and sincerity. FilterBank specializes in corporate credit investigations, recruitment filtering, and anti-social checks to help organizations make informed, trustworthy decisions. With a focus on transparency and reliability, FilterBank continues to provide services that address organizational challenges and foster societal trust.

Here’s what we asked him:

Could you share your perspective on the overall landscape in Japan for the Virtual Assets industry?

Jun’s Response:

“I admire how Japan has built such a strong foundation for its virtual asset industry. They've put a lot of effort into clarifying regulations and stabilizing the market, making it one of the more mature and secure environments for digital assets globally. The strict licensing system from the Financial Services Agency, regular audits of exchanges, and the introduction of clear asset protection standards have helped improve transparency and trust in the entire sector. For me, it’s clear that these measures have strengthened investor protection and restored confidence in the market. All of this makes Japan an incredibly attractive place for both local and international players in the virtual asset space.”

Key Takeaway:?

Japan has built a strong, secure virtual asset industry through clear regulations, strict licensing, and regular audits, fostering trust and transparency. These measures have made it an attractive market for both local and international players.

With that in mind, could you share your views on potential risks/fraud that may be exposed when setting up a VA business in Japan?

Jun’s Response:

“The virtual asset industry is growing at an incredible pace, driven by technological advancements and market shifts. Because of this, the role of legal and compliance teams has never been more crucial. Without a clear understanding of regulations or the ability to quickly adapt, businesses face a real risk of suspension or penalties. Since virtual assets are digital by nature, they're particularly vulnerable to cyberattacks and hacks. We've seen this play out time and again, both domestically and internationally, with exchanges and wallets being breached, and customer assets being stolen. On top of that, there are still ongoing issues with malicious projects and unregistered businesses using the unique features of virtual assets to scam investors. These fraudulent activities not only harm investors directly but also erode the trust that the entire industry relies on.”

Key Takeaway:?

The rapid growth of the virtual asset industry makes legal and compliance teams essential for navigating regulations and preventing penalties. Cyberattacks, scams, and fraudulent projects threaten both investor trust and the industry's overall security.

From a business operator’s standpoint, what are the possible policy measures they can consider to ensure proper supervision and maintain internal control?

Jun’s Response:

“To strengthen the compliance system, I believe it's essential to create a dedicated team focused solely on managing compliance with laws and regulations. Having an internal audit system in place, conducting regular audits, and performing risk assessments would allow companies to spot potential operational risks early on and take the right steps to mitigate them. When it comes to data security, it's also crucial to actively embrace encryption technology, uses multi-signature wallets to enhance security, and implement monitoring tools to stay ahead of potential cyberattacks. By taking these proactive measures, businesses can better protect both their operations and their customers.”

Key Takeaway:?

Creating a dedicated compliance team, conducting regular audits, and implementing strong data security measures like encryption and multi-signature wallets can help businesses mitigate risks. These proactive steps safeguard operations and protect customers from potential threats.

With your expertise in supporting Japanese businesses for more than four decades, how is background screening for the VA industry different from that for traditional regulated financial industries?

Jun’s Response:

“In the virtual asset industry, it’s crucial to consider global risks, which is why one of the key factors in evaluating candidates is their ability to navigate the varying regulatory environments and legal risks across different countries. It’s not just about knowing the rules; it's about understanding how they shift from region to region. On top of that, a deep understanding of blockchain technology and smart contracts is essential. So, assessing a candidate’s technical skills in these areas is a must. Finally, the issue of anonymity is something unique to the virtual asset space. It’s vital to conduct a thorough background screening of a candidate’s past behavior and the source of their funds, as these factors are much harder to trace and verify than in traditional finance, where transparency is more straightforward. These are all critical elements that set the virtual asset industry apart from the traditional financial world.”

Key Takeaway:?

In the virtual asset industry, evaluating candidates requires expertise in global regulations, blockchain technology, and smart contracts. Thorough background checks are essential, as anonymity and fund tracing pose unique challenges compared to traditional finance.

Are there any particular checks you believe employers should consider when hiring for the VA industry in Japan, and why?

Jun’s Response:

“When hiring for the virtual asset industry, there are some additional key considerations beyond the typical qualifications. One of the most important is conducting a thorough financial criminal history check. Given that virtual assets are vulnerable to misuse for money laundering and fraud, it’s essential to investigate whether a candidate has been involved in any past criminal or financial misconduct. This can be done through detailed background checks, and leveraging third-party services can help add an extra layer of credibility to the process. Another crucial factor is the candidate's sense of ethics and commitment to compliance. Regulations in the virtual asset space are constantly evolving, and new risks pop up almost every day. It’s vital to assess whether the candidate has demonstrated the ability to adapt to regulatory changes in their previous roles and apply appropriate risk management practices. Their track record in navigating these shifts will give you insight into their readiness to manage future challenges. Knowledge of international regulations is also a must. Since global transactions are a regular part of the virtual asset industry, familiarity with standards like Anti-Money Laundering (AML) and Know Your Customer (KYC) is non-negotiable. It’s important to evaluate how candidates have applied these frameworks in their past roles, ensuring they bring a global perspective to the table. Lastly, checking a candidate’s history on social media and their online activities is essential. Social media plays a big role in communication and PR within the industry, so understanding what kind of statements or actions they’ve made in the past can help determine whether they align with the industry’s trust and reliability standards. Their public persona can say a lot about their professionalism and how they might represent the company.”

Key Takeaway:?

Key hiring considerations in the virtual asset space include financial criminal history, adaptability to regulatory changes, and expertise in global compliance frameworks like AML and KYC. Reviewing candidates' online activities is also important to assess their professionalism.

This underscores the importance of a secure and compliant foundation in the rapidly growing Virtual Assets (VA) industry. Japan has done an excellent job of creating a strong regulatory framework, with strict licensing and regular audits that foster market trust. However, rapid growth also brings risks, such as cyberattacks, fraud, and evolving regulations, making robust legal and compliance teams essential. To stay ahead, businesses must prioritize dedicated compliance staff, regular audits, and strong security protocols. When it comes to hiring, background checks should go beyond the basics, evaluating financial criminal history, blockchain expertise, and knowledge of global regulations. By focusing on these areas, businesses can thrive in the VA space while maintaining investor and customer confidence.

We’ll be sharing more expert tips and insights on background screening across various industries in the coming weeks, so stay tuned! If there’s a particular industry or aspect of background screening you'd like to explore, feel free to reach out. Whether it’s virtual assets, finance, tech, or any other field, we’ll do our best to bring in the right experts to offer real-world advice and best practices.