We’ve all heard the lame excuses – cryptocurrency is only good for criminal activity, cryptocurrency is only useful for money laundering, cryptocurrency has no real purpose – in trying to derail crypto as a legitimate alternative to fiat. Of course, the statements need to always be taken with a grain of salt and the speaker needs to be identified. In every case, the person uttering the words was a definite fiat pundit who either didn’t understand crypto or who was too imbedded with fiat to be able to see the bigger picture. The truth has begun to surface, though, and none of those arguments stand up to scrutiny. Japan has just given us another good indication of the fallacy behind the arguments.
The Japan Times reports that, according to an “official police document,” the country has seen a total of 340,000 suspected cases of money laundering activity or abuse this year in all types of financial transactions. Of this amount, only 6,000 transactions were related to cryptocurrency. Quickly crunching numbers, that means that only about 2% of all the money-laundering activity was found in crypto.
6,000 is still a big number, for sure. However, given the fact that 334,000 cases of money laundering were recorded through fiat, it’s merely a drop in the bucket. Measures are already being undertaken to help reduce the number more, but the fact that money laundering can still be so prevalent in fiat after centuries of existence shows how difficult the activity is to control.
Japan is working diligently to provide better oversight of cryptocurrency entities and exchanges. It is introducing a number of measures that will help prevent tax evasion and control initial coin offerings (ICO) and the Japan Virtual Currency Exchange Association (JVCEA), a self-regulatory entities overseeing crypto exchanges, has authority to patrol the industry, as well.
Any system anywhere in the world can be used positively or negatively – nothing can escape this, not even cryptocurrency. However, it has already shown itself to be a viable option and one that allows users to take back control of their own money. It is not “that thing that criminals use” or “an environmental disaster.” It is a legitimate type of currency that continues to be accepted by more and more merchants every day.
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It’s no secret that Japanese authorities are looking to take control over tax money it feels is lost in the crypto space. The country is behind an effort being developed by the G20 to implement a global crypto tax strategy that could see governments receive millions of dollars in payments. Back home in Japan, regulators are now looking to introduce a new system that will report significant profits from crypto-based transactions, helping the country recover even more funds.
According to the Japanese media outlet Mainichi Shimbun, the new system to be implemented will give the National Tax Agency (NTA) the ability to gather data from transaction intermediaries, which include crypto exchanges. The NTA will have the authority to request information - such as names, addresses and personal ID numbers - on customers that it suspects of tax evasion. If everything goes according to plan, the system will be developed next year, with an anticipated implementation for the new fiscal year beginning in April 2020.
Not all individuals would be targeted by the new system. The media outlet quotes several sources who said that only those who earn over 10 million yen ($88,700) through crypto transactions would be held accountable.
Currently, crypto exchanges and other companies that are deemed intermediaries only give up data voluntarily. They have the legal ability to refuse to hand over information, but this could change with the new legislation. The exchanges could be forced to adhere to the requests, but would still maintain the right to appeal any request it feels is unwarranted.
The impact won’t be felt widespread, at least not initially. According to a recent survey conducted by the NTA, only just over 300 people indicated that they earned more than 100 million yen through crypto last year. Given the current market slide, the number has probably dropped significantly.
Japan is also ready to come down hard on initial coin offerings (ICO). The Japanese Financial Services Authority (FSA) announced this week that it would introduce stricter regulations on the offering in order to protect investors from fraud. Going forward, any entity wishing to launch an ICO would have to first register with the FSA.
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Japan’s chief financial regulator, the Financial Services Agency (FSA), will reportedly roll out a new set of regulations targeting initial coin offerings (ICOs) in the country. According to Japanese news outlet Jiji Press, the financial authority wants to impose new regulations to protect investors in the crypto space.
Citing the increased fraudulent activities relating to ICOs, FSA believes it is high time they took appropriate actions to provide order and protection for the public. In the proposed regulations, all businesses offering crypto-related services in the country will be required to register with FSA before starting operations.
FSA plans to submit the proposed bill in January 2019, during the ordinary parliamentary session. The proposed bill will seek to revise the financial instruments and exchange law as well as the payment services law, according to the report.
The Japanese FSA is not the only financial authorities to want regulations for the ICO space. In the recent months, the U.S. Securities and Exchange Commission (SEC) has been busy in trying to regulate ICOs. Though it has taken a conservative and traditional approach on ICO, U.S. securities regulator has made a milestone in shaping the ICO industry. Last month, authorities in Thailand also tightened its grip on ICO regulation to create order in the industry.
Different jurisdictions worry that if proper regulations are not set for ICOs, fraudulent activities will cause significant effects on the economy. They have a good reason to worry. According to a recent report by Diar, a cryptocurrency and blockchain research company, ICO fraudulent cases have raised $12 billion, twice more than what was reported in 2017.
In the report, Diar stated that the amount raised by the ICO does not justify their operations. The report also noted that most of the ICOs either get unlisted or they do not have the funds needed to stay in business. More than 60 percent tokens that completed their ICOs in 2017 and 2018, raising over $2.3 billion in the process, have yet to be listed on any exchange.
The report also noted that a good number of these ICOs have ended up being scams. ICO owners conduct an exit scam after collecting millions of dollars from unsuspecting investors. In the last two years, exit scams caused by ICOs amounted to $100 million.
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Japanese cryptocurrency exchange Zaif has completed the handover of its business to Fisco Cryptocurrency Exchange, just a matter of weeks after the company was hacked resulting in losses in excess of $60 million.
The development means those still waiting to get money from the failed exchange will now be entitled to do so from the new owners Fisco Cryptocurrency Exchange, following their high profile bailout of the firm, according to a CoinTelegraph Japan report.
The handover was arranged in a bid to save Zaif after the firm was unable to compensate clients affected by the hack. As a result, many have been left out of pocket with little hope of recovering any of their lost funds until now.
Compensation proceedings are expected to begin this November, as the buyers look to address the losses suffered by those trading through the exchange at the time of the hack.
The completion of the sale and transfer of the Zaif business from parent company Tech Bureau concludes an embarrassing episode for the exchange, which was financially crippled in the wake of the hack.
For the time being, both deposits and withdrawals from the Zaif exchange remain in lockdown, with investors unable to get their hands on their money.
Following the transfer, Tech Bureau said it plans to dissolve the company and move away from its interests in the cryptocurrency sector. It declared, “We will abolish the registration of our virtual currency exchange and plan to dissolve.”
The hack was blamed on inadequate security at Zaif, as well as a lack of effective regulatory structures in Japan at the time. At the time of the hack, Zaif was the 37th largest cryptocurrency exchange in the world by volume.
Following the hack of the Zaif exchange, and the high profile hack of exchange Coincheck which saw some $534 million lost to hackers, Japanese regulators have taken significant steps to tighten the compliance burden on new and existing market players.
Nevertheless, these cases show the risks faced by cryptocurrency exchanges who fail to take adequate security measures to deter crypto scammers and hackers.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Police in Tokyo have arrested eight individuals in connection with a BTC pyramid scheme alleged to have swindled as much as $68.4 million from its victims, according to local press reports.
According to the Asahi Shimbun report, authorities confirmed the men have been taken into custody in connection with an investment company known as ‘Sener,’ which had been running seminars led by foreign speakers.
A video footage leaked online from these seminars showed the participants were offered monthly returns ranging from 3-20% on their investment, and were expected to invite other investors into the scheme in order to maximise their returns.
The suspects are alleged to have collected funds from unsuspecting investors in cash and BTC, covering about 6,000 individual victims over the duration of the scam. As a result, a separate group lawsuit has been filed on behalf of some 73 victims seeking $3.2 million in damages.
Local media are reporting that six of those detained have admitted to their involvement in the pyramid scheme, while two remain in denial of their role in the scam.
Police have suggested that the use of BTC was an attempt to avoid legal enforcement action, given its current ‘gray zone’ status under Japanese law. Cryptocurrencies are not yet considered securities in Japan, thus they fall largely outside of the remit of regulators such as the Financial Services Agency (FSA).
The scam is only the latest of its kind to target BTC fraud, with authorities around the world actively pursuing a number of high profile cases against similar cons and scams.
Japan is regarded as a crypto-friendly jurisdiction, despite significant hacks at some of its most high profile cryptocurrency exchanges, including Zaif and Coincheck.
In October, the country’s FSA gave self-regulating status to the crypto industry, appointing industry body JVCEA to oversee self regulation within the sector. The FSA current issues licenses to crypto businesses such as exchanges seeking to operate within the jurisdiction.
The arrests show the increasingly hardline response being taken by authorities in tackling the blight of BTC scams, which remain all-too-prevalent, regardless of the ongoing weakness in BTC markets.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Sompo, a Japanese insurance company, has partnered with BitPesa, a pan-African digital payment platform, as part of its bid to increase the company’s global presence.
In a statement posted last November 9, Sompo said its partnership with BitPesa is focused on the “digitalization of global remittance services,” noting: “Using BitPesa’s technology, developed through various experiments in remittances and settlements, we will extend our presence in the international remittance service market and consider the application of this technology to the insurance field.”
The partnership will see Sompo utilize BitPesa’s crypto-enabled fiat remittance services to help the Japanese insurer lower the costs and time it takes for transfer of value around the world.
The news comes weeks after another Japanese player, SBI Remit, teamed up with the pan-African blockchain company to bring distributed ledger to transactions between the two regions. According to Cointelegraph Japan, Sompo Holdings has reportedly invested JPY570 million ($5 million) last week for a 10% stake in BitPesa.
Using BitPesa’s international remittance services, Sompo can extend its existing network to reach a broader customer base. BitPesa, also known as BTC Africa, was launched in 2013. Since its launch, BitPesa has made quite a name for itself, focusing on bringing transparency and liquidity to the African continent with cryptocurrency. The firm has rapidly grown its business by helping small and medium-sized enterprises through international partnerships.
BitPesa has secured venture capital funding from VC firms like Draper VC, Digital Currency Group, and Pantera Capital. The agency has used the funding to develop a global remittance network with BTC as a base currency to improve financial infrastructure involving the growing world, Europe, and the United Kingdom.
The two Japanese financial services companies will help BitPesa to expand its international remittance service. The two agreements with SBI Remit and Sompo Holdings should help customers move money between Japan and African countries without third parties. BitPesa simplifies the process by using blockchain to create new currency pairs between Japanese yen and the fiat currencies of Kenya, Morocco, Ghana, Senegal, Uganda, the Democratic Republic of Congo and Tanzania.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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One of Japan’s 16 regulated cryptocurrency exchange has teamed up with Hinomaru Limousine, allowing the airport taxi service to start accepting payments in Bitcoin Cash (BCH), as well as in other cryptos.
On Tuesday, a partnership was announced between between Airport Car Service by Hinomaru and Bitpoint to trial cryptocurrency payments for the company’s airport taxi service on November 6-9 period. According to the exchange, the partnership is part of its effort to “strengthen the service so that virtual currency will become more popular as ‘using, sending, investing’ means.”
Established in 1981, Hinomaru operates a fleet of 362 limos and 161 taxis. Crypto payments are accepted for the service between Tokyo’s 23 wards and the city’s two major airports Haneda and Narita, according to Bitpoint’s announcement. The fares range from JPY19,020 ($168) to JPY37,020 for Narita, and JPY8,300 ($73) to JPY15,600 ($137) for Haneda. If this operation proves to be successful, the crypto payment support is expected to include regular taxi rides.
Hinomaru offers two types of vehicles: high-grade type (Tesla Model S) for four passengers and minivan type (Toyota Alphard) for four to six passengers. Passengers must have a Bitpoint account and use the Bitpoint wallet app for either Android or iOS on their smartphone, to be able to pay with cryptocurrency. Aside from Bitcoin BCH, the exchange wallet also supports payments in BTC and ETH.
The announcement comes several days after Bitpoint entered a business alliance with Carchs Holdings Co. Ltd. to also enable cryptocurrency payments at its used car dealerships.
Carchs Holdings was established in 1989 and currently operates 48 dealerships throughout Japan. Carchs has 17 locations are in Kanto, 10 are in Kansai and in the Hokuriku and Chubu areas, eight are in in the Hokkaido and Tohoku area, and three are in the Chugoku, Shikoku and Kyushu region.
Two Carchs dealerships in Kansai area and in the Hokkaido/Tohoku area have started accepting crypto payments last November 1 with Bitpoint’s help. The used car dealership will continue to accept cryptos until January 9, 2019.
Carchs customers, just like with Hinomaru Limousine, need to have a Bitpoint account and use the Bitpoint wallet app to pay with cryptocurrency.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Cybersecurity experts in Japan claimed that they have found incriminating evidence against suspected hackers of Japanese cryptocurrency exchange, Zaif.
In an official statement released on Monday, Japan Digital Design Co. (JDD), a subsidiary of Mitsubishi UFJ Financial Group, announced that it has succeeded in identifying five transactions of the stolen funds from Zaif exchange. JDD has also shared the information with authorities in Japan.
Zaif exchange had its funds and those of its clients stolen by unknown suspects after their system was hacked in September. The hackers managed to steal JPY6.7 billion (about $60 million) of cryptocurrencies, including Bitcoin BCH, BTC and MonaCoin.
To track the missing cryptos, JDD said it held a hackathon with the help of TokyoWestern, a local cybersecurity team, and EL Plus, a security firm. JDD used an array of cloud-hosted MONA nodes to analyze transactions that involved the stolen currencies. Using this, along with other blockchain technologies, the team was able to determine several things such as the source IP address allowing them to trace the stolen currencies.
During their investigation, JDD discovered that one of the stolen currencies, MonaCoin, started being moved in late October, which made it easier for the team to track the hackers.
It is not yet clear as to the accuracy of the leaked information. Authorities are still doing their investigation to bring the involved parties to justice.
Following the hack, Zaif exchange was recently slapped with a business improvement order by the Financial Services Agency (FSA) in Japan. The regulatory agency stated that it regretted having allowed Zaif to continue operating. FSA claimed that they should have followed multiple warning given in the past about the exchange. In addition, FSA is seeking more information about the exchange and Tech Bureau, the operators of Zaif, including why there was a delay in reporting the hack.
Tech Bureau previously announced its intention to sell its entire stake in the exchange to Fisco Digital Asset Group to pay back customers who lost their funds. The terms of the deal are set to be completed on November 22.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Japan’s chief financial regulator, the Financial Services Agency (FSA), has said that stablecoins are not virtual currencies under the definition provided in the Payment Services Act, in a statement that could have profound effects on how stablecoins are regulated in the country.
Cryptocurrency laws in Japan were overhauled back in April 2017 with revisions to the Payment Services Act and the Fund Settlement Law, effectively creating a new legal regime for cryptocurrency transactions and businesses.
In particular, cryptocurrencies are deemed to be a means of payment, and as a result, do not attract consumption tax. As such, there may be no obligation for firms issuing stablecoins to register for licenses, though they may need to register for issuing payment instruments.
In a statement to news.bitcoin.com, the FSA set out its position in relation to the status of stablecoins, saying, “In principle, stable coins pegged by legal currencies do not fall into the category of ‘virtual currencies’ based on the Payment Services Act.”
Instead, stablecoins were deemed to be a form of ‘prepaid payment instrument,’ which means a different set of regulations for companies issuing and facilitating stablecoin transactions, compared to those dealing in cryptocurrencies as legally defined.
“Generally speaking, companies need to register as the ‘Issuer of Prepaid Payment Instruments’ or the ‘Funds Transfer Service Providers’ based on Payment Services Act, when virtual currency broker dealers trade stable coins,” the regulator told the crypto news outlet.
The definition also means that transactions of up to JPY1 million, around $9,000, can be processed in stablecoins without the requirement for a banking license, allowing fund transfer services to operate up to that limit with a much lower compliance threshold.
According to the FSA, “When a person/an entity engages in exchange transactions of one million yen equivalent or less in the course of trade, registration as a funds transfer service provider is required. For exchange transactions exceeding one million yen, a license for banking business pursuant to the ‘Banking Act’ is required.”
Stablecoins, or fiat-pegged cryptocurrencies, are designed to tokenize fiat, through providing a price-stable cryptocurrency for transactions on chain.
The clarification from Japanese regulators will provide more certainty for those promoting stablecoins, at a time of increasing interest and development activity around stablecoin projects.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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The Japanese cryptocurrency exchange Coincheck is back in business—sort of. According to a statement (in pdf) by the exchange’s parent company, Monex Group, the platform has now relaunched new account registrations. It has also begun to offer deposit and withdrawal support for a limited number of cryptocurrencies.
As of Tuesday, users can now make deposits in either Bitcoin BCH, Bitcoin Core (BTC), Litecoin (LTC) or Ethereum Classic (ETC). Since Monex took over the exchange following a hack this past January, only BTC purchases were still allowed. The move is the latest in the company’s plan to put the exchange back on its feet and operate normally.
Monex indicated that it could eventually support other coins, such as Ethereum (ETH), Lisk (LSK), Ripple (XRP), NEM (XEM) and Factom (FCT) “if the services are confirmed safe and become ready to be offered.”
The company added, “Please be reminded that if the remittance has been directed to the old deposit address or to the deposit address of other cryptocurrencies, we will not be able to reflect on the balance or to return back that particular cryptocurrency.” Existing customers will need to generate a new deposit address when they return to the platform.
In order to receive regulatory approval by Japan’s Financial Services Authority (FSA), all new users will now have to submit to a Know Your Customer process in order to identify the individual. This is one of many requirements the FSA has implemented after it began investigating the company following the January hack.
Deposits will be allowed through area convenience stores and quick deposits in Japanese Yen. They can also be made through Coincheck Payment and Coincheck DENKI services. However, Monex cautions that it will periodically review all deposit methods and could suspend any that it feels is not acting in accordance with regulations.
Monex is hoping to reverse a trend that has seen the exchange lose money since the hack. Not only did thieves get away with over $520 million in cryptocurrencies, the company has been sliding downhill since. Monex recently released its financial report for the most recent quarter, indicating that it had dropped around $5 million in revenue. This was a 66% decline in revenue from the previous quarter.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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