See More on Facebook

Opinion

Japan should ensure user safety on crypto-exchanges

Japanese regulators need to do more to ensure the safety and privacy of users dealing with crypto-currency exchanges.


Written by

Updated: July 16, 2018

The present sloppy state of affairs of virtual money exchange operators cannot be left unchanged. The Financial Services Agency should strive to take effective measures for the sake of users’ security.

Six virtual money exchange operators, including bitFlyer Inc., based in Tokyo, have been given a business improvement order by the agency, in accordance with the revised law on fund settlements. The order was issued primarily for such issues as the inadequacy of their management systems.

The agency’s inspections found that multiple operators had not properly carried out a separation of customer funds and their own assets.

There are also many operators that had neglected to strengthen their systems against such threats as cyber-attacks. Their prioritization of profits and neglect of an issue as important as user security cannot be overlooked.

As the world of virtual currencies is highly anonymous, there are fears that they can be abused to launder money or used in other crimes.

In disregard of such fears, there have been cases in which operators, despite their having been aware of the dealings of customers who were believed to be members of antisocial groups, did not have such transactions suspended. There were also operators that had not compiled lists of antisocial forces.

Their level of awareness concerning the prevention of unlawful dealings is surely too low.

Even more problematic is that registered operators whose operations had officially been authorized by the agency were slapped with administrative punishments simultaneously.

With the latest sanctions, seven out of the 16 registered operators have been punished. There is also a possibility of the number of such operators increasing in the days ahead.

Rigorous registration needed

It should be said that the agency failed to screen them thoroughly. There was also an operator which, at the time of the agency’s screening for registration, gave an explanation that differed from the facts. It may be necessary to reexamine whether the system is defective in itself.

A panel of experts for the agency is working on amending the system concerning virtual money. It is hoped that the panel will present effective measures, including ones to make registration examinations, inspection and supervision more rigorous.

Unlike legal tender such as the yen, cryptocurrencies have no backing, such as one provided by the state or by a central bank.

The actual state of affairs is that virtual money, which has wildly fluctuating value, is not effectively functioning as a means of settlement, for instance.

Virtual currency trading, which has turned into a money game, has been growing sharply. According to an aggregate figure provided by operators, the number of domestic customers tops the 3.6 million mark.

While arrangements for users’ security are yet to be fully implemented, should exchange operators go bankrupt or have their assets siphoned out, the repercussions could be immense. The business operators should act together to make efforts in strengthening their internal controls.

Exchange operators have established a self-regulatory organization and began drawing up self-imposed rules as to unfair trading, the management of clients’ assets and so forth. Questions are being raised about whether they can demonstrate their ability to clean themselves up.

It is also important for virtual money users to clearly recognize the risks involved, such as the possibility of prices plunging and the actual state of affairs of an industry beset with problems.



Enjoyed this story? Share it.


The Japan News
About the Author: The Japan News is published by The Yomiuri Shimbun, which boasts the largest circulation in the world.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Opinion

Modi’s next move

Moeed Yusuf, the author of Brokering Peace in Nuclear Environments: US Crisis Management in South Asia, writes for Dawn newspaper.  For most in Pakistan, Indian Prime Minister Narendra Modi’s move of revoking held Kashmir’s special status in the Indian constitution came as a shock — even if his government’s manifesto categorically stated his intent to do so. Shocking? Hardly. In fact, the move has laid to rest any pretence that Modi recognises the need to be a centrist prime minister and that his pandering to his right-wing RSS support base is only a way to keep them in good humour. Everything about his government’s demeanour over the past couple of weeks confirms the deep ideological conviction that underpins his actions. Sadly, the popular rebuttal that India’s democracy is robust enough to keep the minorities from being jett


By Dawn
August 21, 2019

Opinion

Editorial: Draconian measures in Jammu & Kashmir

India must treat Kashmiris like its own citizens the way it claims and not alienate them any longer. On August 5, the world’s largest secular democracy decided to unilaterally dissolve the autonomy of its only Muslim-majority state and replace it with direct rule by the federal government. Eight days since, the goings-on in what was once Jammu and Kashmir, home to 12.5 million, remain opaque. The region is under curfew, with all communication and media cut and security forces on the streets enforcing a tight clampdown. Even as international media cover Indian-administered Kashmir to shed more light on the situation, India insist


By The Kathmandu Post
August 15, 2019

Opinion

When Jakarta is hit by inconvenience: The capital’s grand blackout

Indonesians are waking up to far-flung grievances. The Sunday blackout on Aug. 4 in Greater Jakarta and parts of West Java was said to be the worst in many years. Family and friends’ gatherings were still cheerful but hot as houses lost their air-cons; the new pride of President Joko “Jokowi” Widodo and that of Jakartans, the MRT, seemed to blush in shame as the power back up, it turned out, was for the stations and not ready yet for the MRT itself – from which passengers had to be evacuated. Gone was all the talk of the digital revolution and the cashless world as people suddenly found they had to rummage for cash for transactions. We’re still waiting for results of an investigation into what happened following the president’s stone-faced response; so speculations range from inadequate back up, slow contingency measures to allegations of sabotage and even whether a single big tree g


By Asia News Network
August 12, 2019

Opinion

Spy on thy neighbours

Nepal’s geostrategic position makes it the perfect place for clandestine diplomatic consultations. Located at the crossroads of Eastern and Western Europe, Vienna is still considered to be the spy capital of the world. Hong Kong has maintained its reputation of being the spy hub of East Asia. Dubai is an ideal place for investment, exchange and operations of all kinds between Central Asia, South Asia and Northern Africa. Singapore is an ideally situated city-state to partner with the


By The Kathmandu Post
August 8, 2019

Opinion

OPINION: Bold initiative in India’s Kashmir push

Like it or loathe it, India’s government made a bold push with its Kashmir initiative. While debates on the constitutionality of the decisions announced by the Government on Monday about Jammu and Kashmir will rage for a long time, and perhaps be adjudicated in a court of law, there can be no question on the boldness of the initiative. From a historical perspective, the presence of J & K in the Indian Union was repudiation of Jinnah’s two-nation theory; however, the presence of Article 370 conferring special status on the territory contradicted, in substantial measure, this repudiation. Realising this, the constitutional provision was introduced purely as a temporary measure. Of course, it suited a confluence of vested interests ~ many in the region and the country and nearly as many outside ~ to permanently keep Kashmir in the twilight zone of constitutional ambiguity while profiting from its mise


By The Statesman
August 7, 2019

Opinion

Dollars and Sense

Andrew Sheng for Asia News Network. Last Wednesday, the US Fed Chairman Jay Powell announced a cut in the Fed Funds rate by 25 basis points, citing slower global growth and muted inflation.   This was evidently insufficient to appease either the markets or President Trump, who openly asked for a ‘large cut’ just before the Federal Open Market Committee (FOMC) meeting. After the announcement, he tweeted, “as usual, Powell let us down.”   Perhaps reflecting Trump’s sentiment, the US markets fell by 1% and the dollar actually strengthened slightly against other currencies. How do we make sense of what is happening to the dollar, the most important reserve currency in the world? The dollar is important, because it not only accounts for 44% of daily global foreign exchange trading and roughly 60% of total official foreign exchange reserves.   Because the dollar has a very liquid m


By Asia News Network
August 5, 2019