The past few months have seen Japanese authorities take quite a humble approach to cryptocurrencies. Most recently, the Financial Services Agency (FCA) have made moves to tighten up regulations within cryptocurrency exchanges, to ensure that customers operating within the exchanges are exposed to as little security risk as possible.
This, came in the wake of the colossal Coincheck hack that has devastated the crypto-exchange arena in Japan. Now, as exchanges start to recover, and the industry begins to pick up pace, in line with the FSA regulations, new reports are out that outline the next move from the FSA as one which aims to remove privacy focused alt-coins from exchanges operating in Japan.
According to Forbes:
“In order to prevent money laundering and other criminal activity, Japan’s Financial Services Agency, is quietly pressuring cryptocurrency exchanges to give up handling Monero (XMR), Zcash (ZEC), and Dash (DASH) and other cryptocurrencies favoured by criminals and hackers. Sources close to the FSA confirmed that they were taking all available steps to discourage the use of certain alternative virtual currencies that have become attractive to the underworld because they are difficult to track.”
The FSA are concerned about how the anonymity provided by such currencies makes money laundering very easy compared to coins such as Bitcoin which are transparent through a public ledger. Though the ledger is anonymised, to an extent, through Bitcoins blockchain for example, it is much easier to detect signs of malicious activity.
At present, the FSA and the Japanese government have not made any moves to make trading Monero, Zcash and Dash illegal as such, however some regulation is expected that will encourage exchanges in Japan to drop listings of these coins, in an attempt to limit access to them and to eventually prevent them from trading in Japan. That way, no new laws will need to be established.
This will of course have an adverse effect on these currencies. With people living in Japan (potentially) unable to exchange them in the future, trading volume will decrease and of course, less people will be moving the currency around. Essentially, being kicked out of Japan is very bad news for Monero, Zcash and Dash, perhaps this news will make them re-style their approach to make the status of the currencies more attractive to the Japanese authorities?
Either way, the FSA clearly have a commitment to ensuring a safe and transparent cryptocurrency industry can flourish, sadly yes, some currencies are favourable to criminals, but, at the end of the day, isn’t the US Dollar the most laundered currency in the world? Has anyone banned that yet?
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