After the hearing in United States last week, it is now Japan that is talking about regulating the market. The Japan Cryptocurrency Business Association and the Japan Blockchain Association are planning to team up to better safeguard investors after the $690 million fraud of virtual currency recently in Japan.
A source mentioned that these groups might merge by April 2018. Last month, Coincheck, an exchange platform based in Tokyo, got hacked for $690 million dollars, which is one of the biggest hacks to ever take place in the digital currency market.
The cyberattack brought to light many flaws in Japan’s system regarding the cryptocurrency market. To solve these flaws, they believe merging the Japanese Cryptocurrency Business Association and the Japanese Blockchain Association can help eliminate heists of that type with regulatory actions.
Lawmakers and cryptocurrency industry leader adopted loose rules to help the flourishment of an industry dominated mostly by start-ups.
The FSA said last week it didn’t approve Coincheck because of worries about weaknesses in the exchange’s systems, declining to give further details. It allowed Coincheck to continue operating, calling for amelioration without a precise timeline.
“Coincheck had grown so big that the FSA couldn’t reject its application.”
“Consumers would be upset. It was politically difficult to close down Coincheck,” said Masakazu Masujima, a lawyer and adviser to the Japan Cryptocurrency Business Association, an industry body. “So they kept requesting it to improve its systems.”
Some cryptocurrency enthusiasts are scared that regulations may take away some of their liberty. On the other hand, many others feel like regulatory actions may be the only way to make cryptocurrencies more widely accepted. Time will tell, but it is easy to assume that with some legislative work surrounding cyptocurrencies, it should bring corporate money into the market, which is necessary for long term growth.