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Japanese Minister Denies Ties to Unregistered Crypto Exchange Under Investigation

July 20, 2018 |

Japanese Minister Denies Ties to Unregistered Crypto Exchange Under Investigation

Seiko Noda, Japan’s Minister for Internal Affairs & Communications, and Minister in charge of Women’s Empowerment, was questioned by the Japanese press on Thursday over her involvement with an unregistered cryptocurrency exchange, which was allegedly violating the Japanese fund settlement law.

Also read: Japan Tax Agency Says Individuals Earning $ 1,800+ in Crypto a Year Will Declare Tax

It was revealed on Thursday that, on January 30, Noda’s secretary and aide allegedly invited an agent of the FSA and the representative of an unnamed unregistered cryptocurrency exchange operator to her parliamentary office. The said exchange operator was under investigation by the FSA for operating without registration, Jiji Press reported. The FSA had slapped the Tokyo-based company with a warning on January 12, saying it was suspected of violating the law.

Given Her Position as a Cabinet Minister, Noda Risked Being Accused of Exerting Pressure on a Government Investigation

Japanese Minister Denies Ties to Unregistered Crypto Exchange Under Investigation
Seiko Noda, Minister for Internal Affairs

“Because there has never been any administrative ties between this company and my office, I believe there is no exerting pressure on the front of this government investigation.” Noda told the press at the Ministry of Internal Affairs, on Thursday.

According to Noda, her secretary and aide solicited an FSA agent for general background briefing regarding crypto exchanges’ legal framework and organized a meeting at her parliamentary office with an acquaintance who represented the company. Noda said she was not present at the meeting. The unnamed company was under government investigation on suspicion of violating the fund settlement law at the time, but Noda’s team claims it was not aware of that fact. An FSA official visited Noda’s office at the Diet members’ building on January 30 to explain Noda’s aide and the representative of the company under investigation the FSA’s positioning on regulations concerning funds raising by issuing cryptocurrency and other matters.

A senior agency official noted that the request from Noda’s office for a briefing could be interpreted as pressure. “A public servant will likely take it as pressure if an aide to a sitting Cabinet member calls for a meeting in which an employee of a company the agency is looking into is also present,” the official was quoted saying to Asahi newspaper.

Noda told reporters that she hasn’t received any political contribution, nor had she made any investment with the company. “I promise I will take more prudent responses in the future.” She added.

The company, which began dealing in its own cryptocurrency in October 2017, received administrative guidance in February 2018 not to continue selling cryptocurrencies.

The Amended Settlement Act

Japanese Minister Denies Ties to Unregistered Crypto Exchange Under Investigation
The National Diet, the seat of the Japanese government

Japanese lawmakers amended the Act on Settlement of Funds in May 2016 to regulate businesses handling virtual currencies. This law was amended after Mt. Gox went bankrupt in Japan in February of 2014 due to the misappropriation of customers’ assets by its operator.

In response to these background events, Japanese lawmakers enacted the Amended Settlement Act with three pillars of regulation as follows:

  • Registration requirements on virtual currency exchange business in Japan;
  • Regulation against money laundering and terrorist financing; and
  • Introduction of rules to ensure customer protection.

What do you think of this Minister’s implication in government investigation into the crypto exchange operator? Share your thoughts in the comments section below!


Images courtesy of Jiji Press and Japan Times.


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The post Japanese Minister Denies Ties to Unregistered Crypto Exchange Under Investigation appeared first on Bitcoin News.

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Japanese Police Seize Cryptocurrency for Parking Violations

July 14, 2018 |

Japanese Police Seize Cryptocurrency for Parking Violations

Japanese police have seized cryptocurrency belonging to a man with unpaid parking fines. The police explain that the revised fund settlement law enacted in April last year allows cryptocurrency to be seized like any other asset.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Crypto Seized for Parking Violations

Japanese Police Seize Cryptocurrency for Parking Violations
Image from the Hyogo Prefectural Police’s website.

The Hyogo Prefectural Police traffic guidance division announced this week that it had seized cryptocurrency owned by a 59-year-old resident with multiple delinquent parking violation charges, local media reported. Hyogo is a prefecture in the Kansai region of the country’s main island, Honshu. Kobe, located west of Osaka and Kyoto, is the capital of the prefecture.

The Kobe Shimbun reported that about 5,000 yen (~US$ 44) worth of cryptocurrency was seized but the police did not reveal which crypto. Nikkei, on the other hand, reported that “there were 2 kinds” of cryptocurrencies “such as bitcoin deposited with an exchange that were seized.” The news outlet elaborated:

According to the prefectural police traffic guidance division, it is the first time in the country to seize virtual currency in relation to parking violations.

Japanese Police Seize Cryptocurrency for Parking Violations
Image from the Hyogo Prefectural Police’s website.

However, the crypto seized from the man’s account at an exchange currently does not cover the total amount owed to the cops. According to the Kobe Shimbun, he has failed to pay a total of 99,700 yen (~$ 885) in violation charges including four parking tickets issued between January 2014 and July 2016.

The news outlet further detailed that if payment is not received by the end of this month, which is the deadline for claiming seized property, the cryptocurrency will be cashed out at the current rate and paid to the prefectural police.

Crypto is Asset that Can be Seized

The man’s parking violations are considered “unattended vehicle.” The Kyoto Prefectural Police explained that the term means “a vehicle that is illegally parked, with its driver away from the car, and which cannot be started immediately. This is regardless of the length of parking time, or whether the vehicle engine is turned on or off, or whether the emergency flashing lights on or off.”

Japanese Police Seize Cryptocurrency for Parking ViolationsUsually, “Land, houses, automobiles, bank savings, salary, and life insurance payouts could be seized, based on the decision of the Public Safety Commission,” the police clarified.

However, in the case of the 59-year-old, the Hyogo Prefectural Police “did not know his place of work and [he] had no cash deposits or savings,” the publication conveyed. Citing that the revised fund settlement act that legalizes cryptocurrency as a means of payment enables the police to seize crypto assets, the news outlet elaborated:

According to the prefectural police, after [crypto] asset value was recognized by the revised fund settlement law enforced in April last year, it [cryptocurrency] was judged as an asset that can be seized.

The Hyogo Prefectural Police have been increasingly active in collecting unpaid fines and have seized small items including an automatic mahjong table, golf bags, figurines, and brand name goods, the Kobe Shimbun described. The division says that they will not allow violators “to escape since it will be unfair for the people who are paying [the fines].”

Editor’s Note: Nathalie Stucky contributed to this article.

What do you think of the Japanese police seizing crypto for unpaid fines? Let us know in the comments section below.


Images courtesy of Shutterstock and the Hyogo Prefectural Police.


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The post Japanese Police Seize Cryptocurrency for Parking Violations appeared first on Bitcoin News.

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Japanese Internet Giant GMO Boosts Own Bitcoin Mining Output With 7nm Rigs

July 9, 2018 |

Japanese Internet Giant GMO Boosts Own Bitcoin Mining Output With 7nm Rigs

Japan’s internet giant GMO has released the latest results of its cryptocurrency mining operation. The company has also started using 7nm rigs for its in-house mining business. News.Bitcoin.com talked to a GMO spokesperson to find out more details.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

1906 BTC and 636 BCH Mined

GMO has released its mining report for June. According to the report, the company has mined 1,906 BTC and 636 BCH since its mining operation began in December last year; 528 BTC and 62 BCH were mined in June.

Japanese Internet Giant GMO Boosts Own Bitcoin Mining Output With 7nm Rigs

From December last year to May this year, GMO’s monthly BTC output was 21, 93, 124, 295, 373, and 472 BTC respectively. Its BCH output was 213, 25, 287, 12, 0, 37, 62 BCH respectively. In April, GMO did not mine any BCH.

A GMO spokesperson told news.Bitcoin.com that in the future:

We will decide the [mining] ratio, BCH or BTC, depending on the market environment.

Rising Hash Rate

Meanwhile, the hash rate of GMO’s pool has grown from 22 PH/s in December last year to 299 PH/s in May and 384 PH/s in June. “Hash rate rose due to the increase in the number of computers we are operating as planned,” the company wrote.

Japanese Internet Giant GMO Boosts Own Bitcoin Mining Output With 7nm Rigs

The company also expects the hash rate of its mining pool to reach 3,000 PH/s by the year’s end.

Using 7nm Mining Rigs

GMO Internet started its mining operations in December last year. The company’s mining business is divided into three areas: in-house mining; cloud mining; and the development, manufacture, and sale of mining machines.

Japanese Internet Giant GMO Boosts Own Bitcoin Mining Output With 7nm RigsLast month, the company launched its first line of 7nm mining rigs, GMO miner B2. The rigs, priced at $ 1,999 per unit, were quickly sold out, according to the company. Some upgrades were subsequently made to the B2 miners, resulting in the launch of GMO miner B3 which the company claims has a maximum hash power of 33 TH/s. Both models will start shipping in November.

According to its first-quarter results presentation, GMO started using an undisclosed number of 7nm mining rigs in its own mining operation last month. The GMO spokesperson confirmed to news.Bitcoin.com:

We do use 7nm rigs in our mining operation…[But] it is an old type that we don’t sell to the market.

In October, the company plans to start using mass-produced 7nm equipment for its own in-house and cloud mining businesses.

While the spokesperson clarified that, in October, “We will use GMO miner B3” for all new mining equipment installations, he noted that existing mining rigs will not be replaced.

What do you think of GMO using 7nm rigs in its own mining operations? Let us know in the comments section below.


Images courtesy of Shutterstock and GMO Group.


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Japanese Man Exploits Free Company Electricity to Make $500 Secondary Income Mining

July 6, 2018 |

Free Electricity at Japanese Company Dorm Allows Man to Make $  500 Secondary Income Mining

Trading isn’t the only way to acquire crypto. Daily SPA, a Japanese media outlet, has reported on a Japanese man using his company dormitory’s free electricity to mine cryptocurrencies without asking permission.

Also read: Japan Gives Jail Sentence to Crypto Miner in a Remote Mining Case

An Extraordinary Income

“Virtual currencies are processed cryptographically,” Sora-san, a Japanese man working in a major Japanese manufacturing company explained to Daily SPA. “A miner is the machine that supports this encryption process. If you mine Bitcoin, you can process 12.5 bitcoins in 10 minutes, which would be the equivalent of 10 million yen, (US$ 90,000). If you mine Ether, you can make 3 ether worth 200,000 yen (US$ 1,800) in 10 minutes.” he added.

But Sora elected to do things differently than everyone else in order to drastically reduce the costs of mining in Japan.

Free Electricity at Japanese Company Dorm Allows Man to Make $  500 Secondary Income Mining

“Because mining requires a huge amount of electricity, the common sense would be to do mining businesses in Mongolia or China, where electricity costs are very low, compared to Japan. But I live in a company dormitory. My electricity costs are null. I thought, I gotta take advantage of this opportunity,” Sora said.

Right now, Sora can mine 0.8 ether in a month. Once converted into fiat, he makes 50,000 yen ($ 500) as a secondary monthly income. “Once it’s set up, I don’t need to do anything, I just let the machine run on its own. It’s really a ‘free’ income,” Sora explained.

The man started to mine crypto in his dormitory room about six months ago. He said he first investigated the limit of electricity, if any, he is allowed to use for free. With the collaboration of his colleague, he bought a bunch of dryers and let them run all day and all night. “I was worried that the dorm manager would notice it,” he said, “but I was able to figure out the amount of usable watts.” He said he calculated that it would cost more than 20,000 yen ($ 200).

“Now that I found out that I can mine in my room, I am planning to extend installing miners in the rooms of my close colleagues,” he said, laughing. Because the company dormitory includes 100 employees, even if the electricity bill rises a little, it won’t get noticed, Sora believes.

What do you think of this man mining in his dorm room in Japan? Let us know in the comments section below.


Images courtesy of Shutterstock and Daily SPA.


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The post Japanese Man Exploits Free Company Electricity to Make $ 500 Secondary Income Mining appeared first on Bitcoin News.

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Japanese Regulator Responds to Reports of Overhauling Crypto Regulation

July 5, 2018 |

Japanese Regulator Responds to Reports of Overhauling Crypto Regulation

Japan’s top financial regulator has responded to media reports that it is considering overhauling the way cryptocurrency is regulated in the country. The authority has been under fire for the inadequacy of its crypto exchange registration process after it issued business improvement orders to a number of exchanges it previously approved.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

FSA Reportedly Considering New Crypto Law

Japanese Regulator Responds to Reports of Overhauling Crypto RegulationOn Tuesday, June 3, the Sankei Shimbun reported that Japan’s top financial regulator, the Financial Services Agency (FSA), is considering overhauling the way cryptocurrency is regulated in the country. The news outlet claims that the FSA is mulling over switching from using the revised fund settlement law to the Financial Instruments and Exchange Act (FIEA), elaborating:

Virtual currency is considered a means of settlement, the same as electronic money etc. by the revised fund settlement law, but if it becomes subject to the regulation by the Financial Instruments and Exchange Act, it will be treated as a financial product.

The FIEA “obliges securities companies and others to manage customer funds and securities (stocks, etc.) separately from corporate assets,” the publication noted. In addition, companies must establish “a strict investor protection system, such as forbidding insider trading of stocks.”

FSA’s Response

Japanese Regulator Responds to Reports of Overhauling Crypto RegulationImpress Corporation subsequently published the FSA’s response to the reports by the Sankei Shimbun and a few other local publications. After contacting the agency to verify the news, the publication quoted the agency conveying, “there was no such fact.”

The news outlet added that the FSA regularly holds a research meeting with academics experts, financial practitioners, institutional members, and other industry participants to respond to various problems surrounding the crypto industry.

The FSA told the news outlet:

If there are such considerations, it will be taken up as an agenda for the study group…the [said] agenda has not been discussed at all in the past 4 meetings…Things that are not on the agenda at all cannot be considered.

Speaking to news.Bitcoin.com, Ken Kawai, Partner at law firm Anderson Mori & Tomotsune, also expressed his doubt of the source of the news, commenting:

In the long run it may happen but not soon. However, cryptocurrency derivatives including futures, swaps, options and CFD may become regulated under the FIEA relatively earlier.

Current Law Inadequate

The revised fund settlement law went into effect in Japan in April last year, effectively legalizing cryptocurrency as a means of payments and requires crypto exchanges to register with the FSA. So far, the agency has fully approved 16 crypto exchanges.

Japanese Regulator Responds to Reports of Overhauling Crypto RegulationHowever, following the hack of Coincheck in January, the agency has tightened its oversight of crypto exchange operators and have found some of the 16 licensed exchanges to have inadequate internal systems. In March, the FSA issued business improvement orders to two of them – Tech Bureau, which operates the Zaif exchange, and GMO Coin.

Then on June 22, the agency issued business improvement orders to six licensed exchanges: Bitflyer, Bitpoint Japan, Btcbox, Bitbank, Quoine, and Tech Bureau. Bitflyer is Japan’s largest crypto exchange by volume.

Following these orders, the FSA has come under fire for how it approves crypto exchanges. The Sankei Shimbun elaborated, “If the management of the exchange is deteriorated, the mechanism to protect customer assets is insufficient,” adding that by regulating cryptocurrencies with the FIEA as securities, “it will lead to the strengthening of user protection.”

Do you think the FSA should change how it regulates cryptocurrency? Let us know in the comments section below.


Images courtesy of Shutterstock and the FSA.


Need to calculate your bitcoin holdings? Check our tools section.

The post Japanese Regulator Responds to Reports of Overhauling Crypto Regulation appeared first on Bitcoin News.

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Report Reveals Phishing Trends Using Japanese Language for the First Time

July 2, 2018 |

Report Reveal Phishing Trends Using Japanese Language for the First Time

Reports have confirmed that Japan has been targeted by cybercriminals using phishing, or illegal acquisition of personal information, to steal cryptocurrencies by sending fake emails to crypto exchange users. Fake emails sent in Japanese language reportedly rose to at least 1,500 by last autumn.

Also Read: How Michael Richo Stole Bitcoins via Imposter Exchange Sites and Dark Web Phishing Schemes

Six FSA Approved Exchanges Taking Inadequate Countermeasures Against Phishing

Back in May, Bitflyer was warning its customers that fake emails used by cybercriminals were redirecting their victims to phishing websites that looked like authentic Bitflyer pages, which requested customers to enter their IDs and passwords. These were then collected by the criminals. Bitflyer received a serious business improvement order by the FSA on June 22.

Fake emails in Japanese language sent to steal private information were confirmed last November

A report published by the University of Tsukuba and Nomura Asset Management, an investment management company, criticized six government approved crypto exchanges saying they were operating without any solid countermeasures against online fraud and phishing schemes.

The Japanese Anti-phishing Council and the information security company Trend Micro reported that it was in November of last year that fake emails sent in the Japanese language targeting cryptocurrencies were confirmed for the first time. The two entities confirmed more than 1,500 fake emails sent in Japanese, targeting cryptocurrency exchanges. “And this is just the tip of the iceberg,” they said.

Government Collaboration is Planned

Japan Credit Information Service’s (JCIS) spokeswoman Teruko Suzuki told news.Bitcoin.com that JCIS has collaborated several times with the Japanese government regarding investigations on cryptocurrency related matters, but JCIS hasn’t got any official contract with government entities yet. “We are hoping to collaborate with the Japanese government entities such as the FSA, the National Police Agency, The Tokyo Metropolitan Police, or even the tax office in the future.”

In January this year, about 580 billion JPY worth of the virtual currency NEM vanished from Coincheck, a major domestic crypto exchange. In this case, fraudulent emails were sent in English to several employees of the company. It was later revealed that they were infected with viruses after opening those emails. After this major Japanese crypto heist, the FSA has been strictly inspecting Japanese crypto exchanges and reported a series of deficiencies in the internal management system, one after another.

Do you think enough is being done by officials to crack down on cryptocurrency phishing? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely

June 29, 2018 |

Yukio Noguchi, a famous economist in Japan and an advisor to Waseda University’s Business and Finance Research Center argues we can’t expect Bitcoin’s prices to rapidly surge again. In his books and in recent articles, Noguchi makes his case eloquently. He wrote a recent article in Diamond Weekly clarifying his position but has been making his case since January of this year and published a book last December.

Also read: The Daily: Analysts Predict Bitcoin Will Rebound, Enthusiasm for State Coins Lost

“Because It’s Now Possible to Trade on Bitcoin Futures You’ll Never See a Rapid Surge Again”

Noguchi points out that the price of BTC is now almost a third of what it was in December of last year. He believes that because it’s now possible to trade on Bitcoin futures people will never see a rapid surge again.

On one hand, he says that because the price of bitcoin has gone down, the costs of sending bitcoin are now back to a level that makes it cheaper than doing bank transactions and this is welcome.

Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely
Bitcoin won’t surge, Japanese economist says

He argues that the introduction of the futures market has driven down the price considerably. This year in January he persuasively argued that the cause of Bitcoin price collapse was the start of the selling of bitcoin futures. “Bitcoin prices were a bubble, to begin with, and now we’re seeing a return to normal values. The San Francisco Federal Bank, in a report, also suggested that the introduction of Bitcoin futures trading caused a price drop.

Additionally, the market is heading towards a situation in which it will be possible to short-sell bitcoin futures and that will also contribute to keeping the prices down.

Noguchi points to a paper published on May 7 by the Federal Reserve Bank of San Francisco, “How Futures Trading Changed Bitcoin Prices“, authored by Galina Hale, Arvind Krishnamurthy, Marianna Kudlyak, and Patrick Shultz. Here is the key passage:

“From Bitcoin’s inception in 2009 through mid-2017, its price remained under US$ 4,000. In the second half of 2017, it climbed dramatically to nearly US $ 20,000, but descended rapidly starting in mid-December. The peak price coincided with the introduction of bitcoin futures trading on the Chicago Mercantile Exchange. The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence. Rather, it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”

Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely
Waseda University, Japan

Noguchi insists that actually, the majority of investors are predicting that prices of bitcoin will continue to fall, especially when some are able to make money from short-selling the cryptocurrency.

He also feels that allowing cryptocurrency to branch off, it makes people feel like they can get new cryptocurrency for free and that also drives down price.

Does he see that as resulting in a decline in the popularity of Bitcoin?

Surprisingly, Noguchi believes it’s a good thing. As the price of bitcoin drops, it becomes a more attractive means of sending money. He calculated that at current prices, if you had to use Mitsubishi UFJ Bank to send money, it costs you 432 yen for any amount above 30,000 yen. But with the current value of Bitcoin, it’s cheaper to send via a regular bank transfer than BTC, unless the value of BTC falls to 675,000 yen. When BTC returns to that level, it will finally be trading at what should be a normal value.

On December 20th last year, Noguchi’s book, “An Introduction To Bitcoin And Blockchain” was published and received rave reviews.

What do you think of Prof. Noguchi’s analysis on Bitcoin surge? Let us know in the comments section below.


Images courtesy of Shutterstock.


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The post Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely appeared first on Bitcoin News.

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Huobi Exchange Suspends Services for Japanese Residents

June 28, 2018 |

Huobi Exchange Suspends Services for Japanese Residents

Crypto exchange Huobi notified its Japanese customers via e-mail on Wednesday that it will be closing accounts of users who are residents of Japan. According to Huobi, their decision came up as a result of compliance issues with the Japanese law.

Also read: Huobi Creates Its Own Cryptocurrency Exchange-Traded Fund (ETF)

No Japanese Traders on Huobi

Huobi Pro reportedly plans to remove the Japanese page from its website as of July 2, and stop providing trading services to Japanese residents. Although the announcement is not yet visible on the official company homepage, further details are expected to appear in the coming hours, a Telegram administrator for Huobi said.

Huobi Exchange Suspends Services for Japanese Residents
Huobi stops crypto trade for Japanese residents

On its disclaimer page, Huobi states that the company deals with electronic assets through the internet and telecommunication network, complying with the laws of each country when conducting business activities. Huobi Global Limited is a company registered and established in the Republic of Seychelles, under its relevant laws.

Huobi also notes that it is not registered as a virtual currency exchange business under the “funds settlement law of Japan.” Therefore, it does not conduct any virtual currency exchange business in the country. The company finally points out that it respects the Japanese law and has not solicited any persons who reside in Japan (individuals or corporations).

Over the past few months, the Japanese Financial Services Agency (FSA) kept imposing new sanctions on cryptocurrency exchanges, towards which some Japanese traders have expressed their frustration. Nevertheless, they also believe that government rules and crypto regulations will benefit the local crypto industry in the long run.

“It’s really problematic that the FSA doesn’t give us the heads-up before announcing business improvement orders for instance that lead to a temporary halt of business [of the company which was issued the business improvement order]. It messes up everything, suddenly,” said Mas Hihara, a Japanese blockchain technologist, ICO adviser and entrepreneur.

In China, despite authorities officially banning virtual currencies from trading in renminbi (CNY), it is rumored in the industry that the Chinese government is still showing interest in the virtual currency. According to some reports, there is a chance that Beijing would actually invalidate the ban on virtual currency trading.

What do you think of Huobi halting trading services for Japanese residents? Let us know in the comments section below.


Images via Shutterstock.


Why not keep track of the price with one of Bitcoin.com’s widget services.

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French Executive at Toyota Makes Nearly Triple Japanese CEO’s Pay

June 26, 2018 |

Toyota Motor’s highest-paid executive got a pay increase of millions of dollars, and he now makes nearly three times as much as his boss.
WSJ.com: What’s News Asia

Six Japanese Crypto Exchanges Respond to Regulator’s Improvement Orders

June 26, 2018 |

Six Japanese Crypto Exchanges Respond to Regulator's Improvement Orders

Six fully-licensed Japanese cryptocurrency exchanges have responded to the business improvement orders issued by the country’s top financial regulator. Two executives have also resigned from their positions as vice presidents of the recently formed crypto exchange association.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Japan’s top financial regulator, the Financial Services Agency (FSA), issued business improvement orders to six regulated crypto exchanges on June 22. Japan currently has 16 regulated crypto exchanges in total. Bitflyer, Bitpoint Japan, Btcbox, Bitbank, Quoine, and Tech Bureau received instructions to improve their crypto exchange businesses. Out of the six, only Tech Bureau has received two such orders.

Crypto Exchange Association

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersThe Japan Virtual Currency Exchange Association (JVCEA), founded in March, consists solely of the 16 government-approved crypto exchanges. It was formed in response to the hack of Coincheck in order to restore public trust in the industry.

The chairman of the association is Taizen Okuyama of Money Partners. There are four directors: Bitflyer’s Yuzo Kano, Bitbank’s Hiroyuki Noriyuki, SBI Virtual Currencies’ Yoshitaka Kitao, and GMO Coin’s Tomitaka Ishimura. While GMO Coin did not receive a business improvement order on the 22nd, it received one in March.

On Monday, June 25, the association announced that two of its vice chairmen have resigned, stating:

In response to the fact that vice chairmen of the association, Yuzo Kano and Hiroyuki Noriyuki, representative directors of Bitflyer Co. Ltd. and Bitbank Corporation, received business improvement orders concerning their virtual currency exchange businesses, we inform you that we have received resignation requests from both of the vice presidents on this date and have accepted them.

The association continued to detail, “we will continue to do our utmost to protect the interests of users and to promote the sound development of the virtual currency exchange industry, including the early establishment of voluntary regulation rules.” Prior to the two resignations, local media reported that the association was going to release self-regulatory rules this week; the association has not confirmed any specific details.

Crypto Exchanges’ Responses

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersJapan’s largest crypto exchange by volume, Bitflyer, announced on the same day as the FSA order its plans to improve a number of business areas. The exchange has also halted new user registrations and will strengthen its account verification process for existing users, as news.Bitcoin.com previously reported.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersBitbank explained that it is reviewing “the internal control system and management system” in order to “ensure proper and reliable operation of the business towards customers’ recovery of trust.” The exchange emphasized that there is no impact to customer assets. A sophisticated management system will be established as the company works closely with the authorities, the exchange elaborated:

There will be no impact on various services and customer assets provided by our company due to the business improvement order this time. You can use the service as usual for all transactions / functions including deposits and withdrawals of Japanese yen.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersBitpoint Japan wrote, “We sincerely apologize for any inconvenience caused to you and other concerned customers,” adding that it will “promptly enhance and strengthen the management control system.”

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersBtcbox similarly declared, “We take the situation sincerely, we deeply reflect on it,” noting that it will build a management system as directed by the FSA’s order.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersQuoine’s CEO, Mike Kayamori, detailed how his exchange will comply with the FSA order. He explained that the order is about “governance, compliance, back-office, KYC and AML,” not security or theft, elaborating: “we will need to pull out some necessary resources, especially from the back end developers who will need to provide the necessary data to comply and work with the FSA.” He further clarified that it means pulling “key people” away who are currently working on his exchange’s Liquid platform to work with the FSA instead, elaborating:

We believe this will be about a month or two process and business will be as usual.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersZaif, operated by Tech Bureau, also responded, referencing the March business improvement order. In addition to complying with the previous order, two more areas will be improved. The first is the “Establishment of an effective risk management system” and the second is the “Establishment of a system to respond appropriately to customers.” The exchange wrote:

We sincerely accept that we received the improvement order again. To make it possible for customers to use it with confidence, we will endeavor to further improve and strengthen the organization and work together throughout the company so that we can establish an appropriate management system.

What do you think of the responses by the six Japanese crypto exchanges? Let us know in the comments section below.


Images courtesy of Shutterstock, Bitflyer, Bitbank, Bitpoint, Tech Bureau, Quoine, and Btcbox.


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