While Japan’s Financial Services Agency (FSA) has already announced that it is preparing to tighten regulations on the cryptocurrency industry, the self-regulatory crypto body, the Japan Virtual Currency Exchange Association (JVCEA), is introducing some of its own measures, as well. The Japan Times news outlet indicates that the JVCEA will establish a ceiling for the amount of digital currencies allowed to be managed online by any of the country’s crypto exchanges.
Japan Times quotes sources close to the JVCEA who haves said that the group is considering putting a cap of between 10-20% on all customer deposits that can be managed online. The JVCEA is now revising its rules, which were first drafted this past July, and will subsequently present them to the FSA.
Typically, crypto exchanges store their users’ crypto assets in cold storage wallets, which aren’t connected to the Internet. A certain percentage is kept in a hot wallet, or an Internet-connected storage facility, which are tempting targets for hackers. The new rules will prevent hackers from gaining access to the majority of the assets managed by the exchanges.
Two Japanese exchanges have been hacked this year, resulting in major losses. The first was in January when Coincheck was attacked and hackers made off with around $523 million in NEM coins. The assets had allegedly been stored in hot wallets that had relatively low security. The FSA was compelled, following the hack, to intervene into the crypto space and began cracking down on the operations. It has since issued a number of business improvement orders, a type of administrative slap on the wrist that can carry financial penalties, and has pulled the plug on several companies.
The second high-profile hack occurred more recently. The Zaif exchange was hacked about two weeks ago, resulting in just under $60 million in Bitcoin, Bitcoin BCH and MonaCoin being taken. The hack was an embarrassment for the exchange, as it didn’t realize that the hack had taken place for about two days following the breach. Afterwards, Zaif announced that it would reimburse all of its clients, but only after its parent company, Tech Bureau, agreed to relinquish significant control of the company to Fisco Digital Asset Group.
A new feature for the Bitcoin BCH network has been added this past weekend, continuing the development of the world’s leading retail-driven cryptocurrency. Developers behind the Simple Ledger Protocol (SLP) announced that they have successfully created the Bitcoin Files Protocol (BFP), which allows for small files to be uploaded to and downloaded from the Bitcoin BCH blockchain.
BFP was developed by a number of SLP programmers, including Ryan X. Charles, Mark B. Lunderberg, Kames Cramer, Calin Culianu, Jonald Fyookball and Bitcoin BCH programmer “Unwriter.” Cramer explained the protocol on Yours.org, saying, “The SLP developers have created a very simple protocol for uploading and downloading small files (<5kb) to the Bitcoin Cash blockchain, it is called Bitcoin Files Protocol (BFP) — Once a file is uploaded it can be simply downloaded using a single transaction ID.”
He further added, “SLP Token V1 has two fields in its Genesis transaction called `token_document_url` and `token_document_hash`. These fields to allow any additional token related data to be attached to a token — The thought was that a user could “simply” upload a file to somewhere in the cloud and provide its URL and hash.”
On-chain file storage systems are necessary because the majority of cloud storage services are not inherently resistant to censorship and are often centralized. “It turns out very few cloud storage services permit anonymous file uploads with URL for sharing with others,” he asserted.
As developers continue to work on providing real-world functionality for Bitcoin BCH, the digital currency’s advance as the leading cryptocurrency isn’t showing signs of slowing down. The Bitcoin BCH is showing itself to be the most robust, most versatile blockchain and is showing impressive innovation that will help set it apart from the rest of the digital currency alternatives.
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