Monday, January 29, 2018

After major hack and theft at a domestic exchange, Japan may finally be getting ready to regulate the crypticurrency industry

Out of all the major economies in the world, Japan has been the most lenient and even the most welcoming of cryptocurrency use within their borders.  In fact not only has Japan been the most hands off when it comes to regulation of cryptocurrency trading, but they have even allowed its use in commerce as a medium of exchange.

However following a major hack last week at an unregulated exchange which saw an estimated $400 million worth of cryptocurrency stolen from customers, the Japanese government may finally be changing their tune as on Jan. 29 regulators at the Financial Services Agency (FSA) announced they will be conducting a full inspection of all cryptocurrency exchanges, and deciding from there if full regulation of the industry is necessary.

Graphic courtesy of Coin Telegraph
Japan’s financial regulator said on Monday it would inspect all cryptocurrency exchanges and ordered Coincheck to get its act together after hackers stole $530 million worth of digital money from its exchange in one of the biggest cyber heists on record. 
The theft highlights the vulnerabilities in trading an asset that global policymakers are struggling to regulate and the broader risks for Japan as it aims to leverage the fintech industry to stimulate economic growth. 
The Financial Services Agency (FSA) on Monday ordered improvements to operations at Tokyo-based Coincheck, which on Friday suspended trading in all cryptocurrencies except bitcoin after hackers stole 58 billion yen ($534 million) of NEM coins, among the most popular digital currencies in the world. 
The FSA said it ordered Coincheck to submit an incident report and measures for preventing a recurrence by Feb. 13. If necessary, it will conduct on-site inspections of other exchanges, an official told a briefing.- Fortune
Decentralized cryptocurrencies represent both the benefits and problems involved in a market ruled by anarchy and reliance on self-regulation.  Because the past is chock full of examples where man's greed and corruption will eventually despoil any free market, and in the end send investors clamoring to the government to get involved and step in to protect or compensate them for their losses.


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