Japan’s Regulators Are Putting Bitcoin Exchanges Under Heavy Surveillance

[marky89]

As long as this "scrutinization" does not turn into full scale shutting down exchanges and implementing very strict KYC and AML, i really don't mind seeing the Japanese government do this.

But i do have a feeling that maybe this will turn into something like China, first scrutinization of exchanges and then just banning them completely.

I don't think this has anything to do with shutting down exchanges. But it likely does involve heightened AML/KYC procedures. This was inevitable. When bitcoins were worth $2 a pop, no one cared. If they might be worth $10,000 this year or next (and that appears to be the trajectory), then regulators have no choice but to step in and get a handle on the industry.

The magnitude of scams and frauds (and the potential damage caused by them), as well as the scope of money laundering, are much bigger now than years ago, when the market was worth very little.

[pawanjain]

This is not good... South Korea, US and EU could follow Japan and this will lead to serious price drop.
They are just trying to ruin all alt-coins and collect taxes under the 'protecting customers'. I guess I will transfer all my coins to Monero and DeepOnion.

I don't really think this would be a problem. How could they "Ruin" altcoins by collecting taxes because the trading fees would be the same for all the coins. Unless they increase the trading fee and withdrawal charges I don't think they will be ruining any coins. Japan would surely be the largest bitcoin exchange as the Chinese have shut down exchanges. Japan is taking a step towards rectifying any future bugs through its active inspection and that wouldn't cause any increase in price. If there is an increase in price then whatever you said might be true. Let us wait and see what the result would be.

[buwaytress]

This is not good... South Korea, US and EU could follow Japan and this will lead to serious price drop.
They are just trying to ruin all alt-coins and collect taxes under the 'protecting customers'. I guess I will transfer all my coins to Monero and DeepOnion.

I don't really think this would be a problem. How could they "Ruin" altcoins by collecting taxes because the trading fees would be the same for all the coins. Unless they increase the trading fee and withdrawal charges I don't think they will be ruining any coins. Japan would surely be the largest bitcoin exchange as the Chinese have shut down exchanges. Japan is taking a step towards rectifying any future bugs through its active inspection and that wouldn't cause any increase in price. If there is an increase in price then whatever you said might be true. Let us wait and see what the result would be.

You have to trace back the history of Japan's Financial Services Authority (FSA - the agency responsible for monitoring bitcoin exchanges) attention on Bitcoin to understand the rationale of this move. It all started in 2014 with the Mt Gox debacle. Japan was caught offguard. Culturally even, this was a slap to their face, a deep embarassment for it to have happened right under their noses. That's when regulators started putting together this idea of regulating exchanges.

The main items on the early draft is evidence of this. Aims to ensure separation of client and company assets (Mt Gox stored bitcoins haphazardly, the CEO even later "found" a USB with a stash), protection against cyberattacks (Mt Gox claimed it was a hack), auditing (MtGox had terrible accounting).

Of course, it's not just all about preventing another Mt Gox, but that was what started Japan's move down this path.

In that context, it cannot be bad. If anything, this restores confidence for those burnt by the scandal. Japan also has insurers now offering cover for bitcoin exchanges, thanks to this regulatory action. Nothing is ruined.

[squatter]

People should realize that we cannot have adoption without legalization or control - either crypto will forever remain in grey area or will reach mainstream only with quite a concession on our part.

Correct. Proper regulations are a necessity, and at the same time needed in order to keep track of this market. It's impossible for this market to keep in its 2012/2014 state where you could basically do anything you want - this market has evolved, everything has become a whole lot serious now. I remember how this market went nuts at the time China was planning to put certain regulation in place for the first time - the market tanked big time while it wasn't bad news at all. We just have to admit that crypto in general can be easily abused by the individual, and for that reason we should expect even more regulations in the coming years, this is just the beginning.

It would be foolish to think otherwise. Anything that gains enough value and prevalence in society will eventually be regulated. You can't have it both ways. It either remains a niche currency in a "wild west" context but has low value, or it gains mainstream adoption and therefore high value, but is subject to regulation. There's no way around it if you really think Bitcoin is going to the moon. And at this point, I think most of us can agree on that.

[Ctn]

Okay that's the news coming from the Japan as well settled country in regards with bitcoin. It was first country to make the bitcoin legal asset to be used within the country and for merchants it was like great experience to have it with them. Anyway if the government is taking the precautions like that then I believe it's more than good thing and very much security of the nations people and there money. That's the good step after the china ban because at least they did not ban it like the other country and made the market dump itself. Japan might just become the next country having most of the assets in the digital form or bitcoin form.

[deadsilent]

They should coz cryptocurrency community is just getting bigger and bigger. Maybe there are bad people and use cryptocurrency for their business. As other were saying. Bitcoin and other cryptocurrencies can be use by terrorist to buy weapons to spread terror since they are decentralised. That's why they should intensify the monitoring for every exchange. This not new since other countries are already doing the same thing. China ban i think the cause of this because many chinese traders will migrate to foreign exchanges.

[nikisev]

People should realize that we cannot have adoption without legalization or control - either crypto will forever remain in grey area or will reach mainstream only with quite a concession on our part.

Not always true BTW.
Internet was break away from news delivery and copyright protection schemes of the past. It was bad news for newspapers that they haven't adopted new technology. Same can become of money supply. We have Central Bank system for money supply now. It was introduced in 1600 in Amsterdam i think. So its not something that have being forever.

[carlfebz2]

I'm pretty sure the US feds are doing the same, if not making cryptocurrency surveillance more seriously; they probably just didn't announce it to the public. People buying bitcoin usually has their bank account affiliated with their exchange's account so it would be easy for the feds. If only it was easy to buy bitcoin via peer-to-peer. Unfortunately buying on sites like localbitcoins aint cheap. There's always a huge markup on prices.

Its just normal to think off that theres always huge mark up on prices if you do tend to buy bitcoin since they are making money out of it.We know business do really need to gain profits on any trades that they would made.
If japan did already put heavy surveillance on bitcoin exchanges then it sounds good into my ears.

[Samarkand]

...We have Central Bank system for money supply now. It was introduced in 1600 in Amsterdam i think. So its not something that have being forever.

I think fractional reserve banking was originally invented by a bank that was based
in Amsterdam. But the central banking system was heavily influenced
by the ideas that were introduced by the "Amsterdamsche Wisselbank".

However, the first real Central Bank was the "Sveriges Riksbank" (Bank of Sweden).

Basically, the Dutch laid the foundation and pionereed the concepts while the clever Swedes were the first
to actually found a real central bank.

[Kemarit]

http://fortune.com/2017/09/25/japan-bitcoin-exchanges-fsa-financial-regulation/

Japan's financial watchdog will soon pay very close attention to the internal systems of exchanges for virtual currencies such as bitcoin.

The country's Financial Services Agency (FSA) said Sunday that it would be putting exchanges under what The Japan Times called "full surveillance" from next month.

That means monitoring internal systems, such as those used for protecting customers' assets, and possibly on-site inspections.

The scrutiny is a big deal because—thanks to the Chinese authorities cracking down on bitcoin trading in that country—Japan has recently become the largest bitcoin exchange market in the world.

This is not good... South Korea, US and EU could follow Japan and this will lead to serious price drop.
They are just trying to ruin all alt-coins and collect taxes under the 'protecting customers'. I guess I will transfer all my coins to Monero and DeepOnion.

Why would it be a bad thing? On the contrary Japan is moving on the right direction. And their local Financial Service Agency have already approved QUOINE and bitFlyer. So again, Japan has set the bar high once again. So those exchanges need to comply with those regulators which meant that you can trade without any qualms because you are protected. Of course they are being closely monitored from day 1 and this move was a lessons learned from the Mt. Gox debacle years ago.

[pearlmen]

I don't expect for the fact that Japan is giving a green light on bitcoin, does not mean they won't still protect their own financial system not because of the innocent users who hardly trade 1btc but the big shakers in the industry who will see that as an opportunity to funnel funds in an out of the economy without the eyes of government prying on their activities which I feel is still very much ok.