A shakedown is happening in Japan as regulators tighten their grip on Cryptocurrency exchanges.
As per Japanese Law, all cryptocurrency exchange operators are required to register with the FSA – Financial Services Agency, and as reported by the Nikkei Asian Review, of the thirty-two exchanges in Japan, half have registered while the other sixteen continued to operate under review. Tokyo GateWay and Mr. Exchange are the two exchanges withdrawing their applications to register. Just one year ago, on 1 April 2017, the Japanese government passed into law making Bitcoin a legal payment system – indeed a breakthrough for cryptocurrency, the Internet of Money.
Legalizing Bitcoin meant that the government has oversight of all activity, by individuals and enterprises, enforcing mandatory requirements such as KYC (Know your Customer) documents.
This trailblazing bold move by Japan started the Bitcoin bull run of 2017 giving rise to more investor adoption such as Japan’s retail investor, “Mrs Watanabe”. The Japanese Yen continues to dominate Bitcoin volume by currency – as per the graph below. Tokyo GateWay and Mr. Exchange are adding their names to the other three exchanges that closed in Japan after the CoinCheck hack during January.
There could be more closures in the pipeline. As cryptocurrency increases in value, cybercrime will increase and “hot wallets” on exchanges will continue to be high risk.
As a result, centralized exchanges are growing in popularity and recently, the launch of an “Embedded Exchange”was announced – more information, click here