Japan became one of the first countries to regulate the digital asset market which has propelled its position as the leader for crypto communities and institutions. Japan amounts to the highest trading volume for cryptocurrencies.
It has become mandatory for any new crypto service offerings institutions to get a permit of operation from Financial Service Agency (FSA). Coincheck which experienced one of the worst attacks in the crypto Exchange history lost tokens worth $530 million in January 2018. Now Coincheck has become one of the few permitted licensed Crypto exchange operator after the announcement
The license could prove to be a game changer for both Coincheck and the Monex group, which bought the troubled exchange at a mere sum of $33.5 million. Japan is the biggest crypto market at present the move could help both the parties recover the money and also return the users their stolen toke amount.
Japan: The First Country to Regulate Cryptocurrency
After regular attacks on exchanges and losses amounting in millions, Japan decided to start a licensing scheme, under which the financial watchdog FSA would grant the license of operations. Only these licensed exchanges would be permitted to operate in the country.
The reforms were put in place to negate the nuisances of hackers and potential scams in making. However, the licensing is not a sure shot guarantee against the attack, as the small-scale hacks are still predominant.
Recently Zaif one of the licensed exchanges experienced an attack making it lose $20 million only last September. Other major crypto markets include South Korea, where an inspection conducted showed, one-third of the existing Exchanges shows satisfactory security measures.
Japan has realized the potential in sustainability and worked with its financial watchdog FSA to frame certain regulation to make sure that people do not lose to a potential scam. However, this is the very beginning of the partnership between the centralized network of governance and decentralized technology like Blockchain.
More institutions and countries need to work in collaboration for the larger good of the community. Since the hack attacks cannot be completely eliminated as long as the humans play a major role, we can only hope to contain it to a level where it does not prove to be disruptive.