Japanese researcher cryptocurrency and co-founder IndieSquare Leather Higashi (Higashi Koji) finds that Japanese cryptocurrency market is currently recognized as the world’s largest daily trading volume. This market has the most friendly and flexible system of regulation for bitcoin businesses and investors.
In addition, the government of Japan recognized and legitimized bitcoin as a means of payment, it did it to Althingi. Higashi noted that against this background, the consumer in Japan is questionable, since ordinary consumers can review small altcoins as an alternative to bitcoin.
«Regulation of the cryptocurrency in Japan was much milder than in other countries, giving more freedom to the exchanges, but this had an impact on the effectiveness of consumer protection. As the financial sector, industry today, more bureaucratic, and technological development did not kept pace with the speculative demand,» says Higashi.
In other words, Higashi believes that the freedom that the Japanese government has provided Japanese cryptocurrency exchanges and trading platforms, forcing Japanese consumers to think that any cryptocurrency that is in the listing of regulated crypto-currency exchanges, is a legitimate alternatives to bitcoin.
The freedom that gave the Japanese government a local cryptocurrency exchanges, can be useful for Japanese and including the global cryptocurrency industry as it allows the consumer to decide whether certain cryptocurrency as legitimate.
For example, in the US some States have introduced rules of «Know your customer» (Know Your Custimer, KYC) — laws aimed at combating money laundering and other rules that have forced many companies to cease their activities on the territory of the United States. So, for example, introduced new York licensing (Regulations) have forced three major cryptocurrency exchange, ShapeShift, Kraken, Bitfinex, to withdraw from the us market due to the unfriendly and inefficient regulatory framework.
As you can see from the previous example, strict rules may slow the growth of the cryptocurrency market as a whole. In this respect, a friendly and flexible rules of the Japanese government beneficial for cryptocurrency businesses and investors.
It is certainly possible to agree with Higashi and say that the Japanese market is not lack of rules to protect investors, but due to the practicality of the regulation, Japan is the largest bitcoin market in the world. Besides, Japan is the only market which has released a national license for cryptocurrency exchange, which allows the market to work consistently.
However, there is another side. Under the rules, operators of cryptocurrency exchanges must report suspicious transactions that may be linked to money laundering. It is about 170 such cases were reported by six operators of cryptocurrency exchanges in the period from April to October of the current year.
The national police Agency of Japan (NPA) has prepared the first report on cases of money laundering through crypto-currencies after the spring of this year updated a law requiring cryptocurrency exchanges to report suspicious transactions that may be associated with money laundering. This update came into force simultaneously with the adoption of the law, according to which bitcoin has been recognized in Japan, the official means of payment. And despite the fact that according to this law, all cryptocurrency exchanges had to go through licensing, some of the 11 exchanges that have received a license in September, yet were forced to cease operations.
Once the NPA has analyzed 170 cases pointed out by the operators of cryptocurrency exchanges, some of them were transferred to the investigative bodies.