Amateur Crypto Investors Caused the Burst, Japanese Expert Says

Amateur Crypto Investors Caused the Burst, Japanese Expert Says

Strengthening regulations will increase crypto investors’ protection, and the amateur speculation bubble will end, says Masayuki Tashiro, representative director of Fiscalo Digital Asset Group and market analyst, who handles a crypto business in Japan. The real value of cryptocurrency will be questioned after we leave the bubble, the expert says.

Also read: Japanese Association Seeks Authority to Enforce Self-Regulation on Crypto Exchanges

Is the Cryptocurrency Market Heading to Maturity?

Amateur Crypto Investors Caused the Burst, Japanese Expert SaysThe overall excitement and confusion around cryptocurrency in Japan is over as regulations had been strengthened. In many ways the environment surrounding Bitcoin has changed dramatically this year. Last December, the highest value for 1 BTC was 2.5 million yen (22,500$), then in January it dropped by more than half, at 700,000 yen (6,300$), when on January 26th, 58 billion yen (520 million$) worth of cryptocurrency Nem (NEM) went missing from Coincheck, a local exchange.

“The overheating feeling around cryptocurrency that went on until the beginning of the year was just a bubble,” Masayuki Tashiro said. Right after the Coincheck heist, Japan’s Financial Security Agency (FSA) took immediate measures in February and raided the company and other crypto exchanges to find out what was going on. Then six companies including the major registrants received heavy administrative sanctions in June. BTC price then fell to 600,000 yen (5,400$). Currently the price of one BTC is about 800,000 yen (7,200$), but it is a situation that is changing around all the time, the market analyst pointed out.

Real Value of Crypto Will Show After the Bubble Is Over

The real value of crypto will show after the bubble is over, the expert says. As the Coincheck management apologized during a press conference in Tokyo last January for failing to keep the cryptocurrency, its overall price dropped dramatically and the trend to regulate cryptocurrency accelerated drastically. “Futures traders in the US launching the BTC futures trading market last December also influenced the situation a lot. And those futures hedge funders entered the market as a tide, all at once, that influenced the bubble to burst too,” Tashiro explained, “the more the price falls, the more people tend to sell. And the biggest factor for the bubble bursting is the actions taken by beginners who don’t have the experience of investing in crypto,” he added.

Amateur Crypto Investors Caused the Burst, Japanese Expert Says

“To begin with, there aren’t any investment measures with crypto such as PER (Price Earnings Ratio) and PBR (Price Book-value Ratio) as we see with stocks, so people shouldn’t touch upon it if they don’t understand it. Without any solid understanding, newbies shouldn’t have gotten involved in crypto,” Tashiro explained. Japan’s crypto industry has established a self regulatory association called the Japan Cryptocurrency Exchange Association in April, which is prospecting to set up self-regulatory rules by October. Rules and regulations around crypto have been strengthened globally, and the overall crypto boom seems to have dissipated.

Crypto Is Still a Remarkable Market

“Strengthening the rules is a good move,” the analyst said, “people will be able to invest with peace in their mind as the poor quality crypto vendors will exit and a strong anti-money laundering system will be put in place internally within each exchange,” Tashiro says. “Furthermore, last year BTC price rose by more than 40% twice,” he explained, “this is the same figure as the Nikkei average during the Lehman shock. In the near future, although we might not reach that high, we can still expect a rise in the range of 800,000 yen (7,200$). Although the price range at the moment is around 30,000 to 40,000 yen (270 to 360$), a rise always occurs, that’s why [crypto] is still a remarkable market.” Regarding future market trends, “personally I am bullish,” Tashiro said, “and by the time the outline of the regulations will come together in October, those investors who will feel safer will come back. I hope things won’t get as overheated as last year, but I believe BTC can win back the value of 1 million yen (9,020$) in range,” he believes.

The bubble which attracted or was caused by amateur investors is over, and the reinforcement of regulation is a rather securing outcome from the perspective of investors’ protection in the cryptocurrency market. From this Japanese expert’s point of view, it seems that there is still room for earning in crypto.

What do you think of this Japanese analyst’s expectations? Share your thoughts in the comments section below.


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Japanese Association Seeks Authority to Enforce Self-Regulation on Crypto Exchanges

Japanese Association Seeks Authority to Enforce Self-Regulation on Crypto Exchanges

Japanese crypto exchanges may soon have an official self-regulatory body. The Japan Virtual Currency Exchange Association has applied with the country’s financial regulator to become the authority for self-regulation, with the power to enforce rules on its crypto exchange members.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Registering with FSA

The Japan Virtual Currency Exchange Association (Jvcea) announced Friday that it has applied for certification with the country’s top financial regulator, the Financial Services Agency (FSA).

Japanese Association Seeks Authority to Enforce Self-Regulation on Crypto ExchangesThere are currently 16 government-approved, fully licensed crypto exchanges in Japan; all of them are members of the Jvcea.

The association explained that it is seeking to become a “certified fund settlement business association,” which will serve as a self-regulatory body for crypto exchanges. Its primary objectives include providing “guidance and recommendations to members to comply with regulations, laws and self-regulation rules,” the Jvcea’s announcement reads. The association hopes to contribute “to the sound development of the virtual currency exchange industry and the protection of the interests of users.”

According to To-o Nippo Press:

 The Financial Services Agency will carefully examine the affairs of the association and carefully investigate whether proper group management can be expected. It will take 1 to 2 months for the review.

Japanese Association Seeks Authority to Enforce Self-Regulation on Crypto ExchangesThe Jvcea was established in response to the hack of Coincheck in January where 58 billion yen (~US$521 million) worth of the cryptocurrency NEM was stolen. It aims to restore public trust in the crypto industry.

Japan also has two other crypto associations which predate the Jvcea: the Japan Blockchain Association (Jba) and the Japan Cryptocurrency Business Association (Jcba). Most crypto exchanges in the country are members of one or both of these organizations.

Self-Regulatory Rules Submitted

Japanese Association Seeks Authority to Enforce Self-Regulation on Crypto ExchangesThe association has reportedly drafted self-regulation that includes a number of restrictions on how crypto exchanges operate. In June, local media reported that privacy coin listings will be restricted and a ban on insider trading will be imposed.

Other restrictions include a margin limit of 4 times leverage, trading caps for all customers, and trading restrictions for minors and the elderly.

“We also submitted voluntary rules on margin trading and insider trading [to the FSA],” Jiji Press quoted the association:

If it [the Jvcea] is approved as a self-regulating organization, it will be possible to enforce disposition and investigation of member exchanges, expulsion of membership…in a mandatory manner.

According to the publication, the FSA “plans to entrust the organization with the flexibility to rapidly develop technologies and to combine technological innovation and customer protection.”

The association wrote, “We will work closely with registered virtual currency exchange traders and all those who support us while fully working to restore users’ trust in domestic virtual currency handlers and markets.”

What do you think of the association’s efforts? Do you think Japan should have a self-regulatory authority? Let us know in the comments section below.


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Japanese Bitcoin Exchanges Planning Several Trading Restrictions: Report

Japanese Bitcoin Exchanges Planning Several Trading Restrictions: Report

The association of 16 government-approved bitcoin exchanges is reportedly working on imposing a number of trading restrictions. Jiji Press reported that there is a plan to impose trading limits for all users and additional restrictions for minors and the elderly. This follows recent reports of the association introducing margin trading limits as part of its self-regulatory rules.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Possible Trading Caps

According to Jiji Press news agency, the Japan Virtual Currency Exchange Association (Jvcea) is planning to set trading limits for its crypto exchange members.

Japanese Bitcoin Exchanges Planning Several Trading Restrictions: ReportThe association is comprised of all of the 16 government-approved crypto exchanges in Japan. It was established in May in response to the hack of Coincheck in January.

“The association will decide on the issue soon,” sources told the news outlet Friday. It will then file with the country’s top financial regulator, the Financial Services Agency (FSA), for approval “to be recognized as a self-regulatory body under the payment services law,” the sources detailed.

“The planned rule is aimed at preventing cryptocurrency traders with relatively small assets from suffering heavy losses and facing difficulties with daily expenses,” the sources also added, noting:

The industry group plans to allow exchange operators to choose from two options: A blanket ceiling that is low enough for the safety of customers with limited assets or setting different limits for different customers based on their age, assets, investment experience and income levels.

Other Restrictions Being Considered

Japanese Bitcoin Exchanges Planning Several Trading Restrictions: ReportThe association has been working on self-regulatory measures since its establishment. Last month, Nikkei reported that it is planning to set rules to prohibit insider trading and privacy coins.

The Jvcea self-regulatory rules were expected to be released last month. However, the announcement was delayed when the FSA issued business improvement orders to six of the association’s members, causing two vice presidents of the association to resign.

The trading limit report follows another report that the association is planning to limit margin trading, reducing leverage to 4 times. Currently, Japanese crypto exchanges offer as high as 25 times leverage.

According to the publication’s sources:

The group also plans to require minors to get permission from parents or other guardians before trading, prohibit margin trading in principle, and demand regular checks on the decision-making ability of elderly customers. It will also restrict large-lot orders as a measure against money laundering.

While multiple reports have surfaced regarding the association’s self-regulatory policies, the organization itself has not officially made any announcements.

Do you think Japanese exchanges should impose trading restrictions? Let us know in the comments section below.


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Japanese Crypto Exchanges Working on Lowering Margin Trading Limits

Japanese Crypto Exchanges Working on Lowering Margin Trading Limits

Japanese cryptocurrency exchanges may soon set a strict limit on the leverage they offer for margin trading in order to better protect investors. The association comprised of 16 government-approved crypto exchanges is reportedly imposing a leverage limit as part of its self-regulatory rules. There will be a grace period and exceptions.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Leverage Limit on Margin Trading

The Japan Virtual Currency Exchange Association (JVCEA) is reportedly planning to impose a leverage limit for crypto margin trading in order to protect investors, local media reported Wednesday.

Japanese Crypto Exchanges Working on Lowering Margin Trading LimitsThe association’s members are all of Japan’s 16 government-approved crypto exchanges. It was set up in response to the hack of Coincheck in January in order to rebuild public trust in the crypto space.

The JVCEA has been working on self-regulatory measures. Nikkei reported Wednesday that the proposed rules include “an across-the-board cap on the extent to which traders can use borrowed funds to magnify gains and losses,” adding:

The self-regulatory body for Japan’s cryptocurrency exchanges is firming up plans to set a 4-to-1 leverage limit on margin trading, aiming to reduce the risk of massive losses given the volatility of these assets.

“The measure would take effect after a one-year grace period. The organization is considering allowing exceptions if exchanges meet certain conditions, such as implementing automatic stop-loss mechanisms,” the publication detailed. With the volatility of crypto trading, “some highly leveraged cryptocurrency investors in Japan have suffered heavy losses, spurring criticism from consumer protection groups.”

Japanese Crypto Exchanges Working on Lowering Margin Trading LimitsWhile the association itself has not confirmed its plans, the news outlet wrote that the “draft rules also include bans on insider trading and dealing in cryptocurrencies suspected to be used in money laundering.”

Last month, six of the association’s members received business improvement orders from Japan’s top financial regulator, the Financial Services Agency (FSA). Subsequently, Yuzo Kano and Hiroyuki Noriyuki, representative directors of Bitflyer and Bitbank Corporation, who were serving as vice presidents of the association, resigned to focus on their exchange businesses.

Exchanges Set Their Own Limits

Each cryptocurrency exchange in Japan sets its own limit for margin trading. DMM Bitcoin, the crypto exchange of Japanese e-commerce and entertainment giant DMM Group, for example, offers 5 times leverage.

Japanese Crypto Exchanges Working on Lowering Margin Trading LimitsZaif, operated by Tech Bureau, offers up to 7.77 times leverage. “You can choose leverage from 1x to 7.77x, according to your trading style,” the exchange wrote on its website.

GMO Coin, the exchange subsidiary of Japanese internet giant GMO, offers 5 times and 10 times leverage for BTC/JPY. However, only 5 times leverage is offered for the margin trading of ETH, BCH, LTC, and XRP against the JPY.

Bitpoint offers leverage of 2x, 5x, 10x, and 25x for BTC/JPY, BTC/USD, BTC/EUR, and BTC/HKD. Bitflyer’s Lightning platform allows leverage of up to 15 times.

Nikkei further elaborated:

Japan currently lacks limits on cryptocurrency margin trading…Some exchanges permit leverage of up to 25 times the deposit, citing regulations, setting that as the ceiling for foreign exchange trading.

Do you think Japanese exchanges should have a lower leverage limit? Let us know in the comments section below.


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Largest Association of Investment Professionals Adds Crypto to Curriculum

Largest Association of Investment Professionals Adds Crypto to Curriculum

CFA Institute, with over 150,000 members, is adding cryptocurrency topics to its curriculum for the first time. The course material will be released in August. A record 227,031 people in 91 countries and territories reportedly registered to take CFA exams this year.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Crypto Added to CFA Curriculum

Largest Association of Investment Professionals Adds Crypto to CurriculumThe world’s largest association of investment professionals, CFA Institute, “is adding topics on cryptocurrencies and blockchain to its Level I and II curriculums for the first time next year,” Bloomberg reported.

A global, not-for-profit organization, CFA Institute offers a range of education and career resources including the Chartered Financial Analyst (CFA) and the Certificate in Investment Performance Measurement (CIPM) designations. Its membership stood at 156,800 at the end of FY2017.

Citing that a majority of the candidates came from Asia, the news outlet elaborated:

A record 227,031 people in 91 countries and territories registered to take CFA exams in June…Material for the 2019 exams will be released in August, giving candidates their first opportunity to start logging a recommended 300 hours of study time.

Crypto – ‘Not a Passing Fad’

The CFA curriculum is organized into three levels. Level I tests “knowledge of the ethical and professional standards.” Level II tests how these standards are applied to situations analysts face. Level III tests how they are applied “in a portfolio management and compliance context.”

Largest Association of Investment Professionals Adds Crypto to Curriculum

Each level currently consists of 10 topics such as quantitative methods, economics, corporate finance, equity management, fixed income, derivatives, and alternative investments.

Largest Association of Investment Professionals Adds Crypto to CurriculumThe crypto addition is part of a new reading called Fintech in Investment Management, Bloomberg conveyed. The institute decided to include it “after industry participants showed surging interest in surveys and focus groups.”

Stephen Horan, the institute’s managing director for general education and curriculum in Charlottesville, Virginia, explained that “the CFA material on crypto and blockchain will appear alongside other fintech subjects including artificial intelligence, machine learning, big data and automated trading.” Citing that “more crypto topics, such as the intersection of virtual currencies and economics, may eventually be added to the curriculum,” he asserted:

We saw the field advancing more quickly than other fields and we also saw it as more durable…This is not a passing fad.

A 27-year-old financial economics student at Columbia University who took the CFA Level I exam in June, Kayden Lee, was quoted by the news outlet saying that “it will be beneficial for us since there’s been a huge expansion and adoption of crypto in our investment universe.”

What do you think of CFA Institute adding crypto topics to its curriculum? Let us know in the comments section below.


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Russia Now Has a Registry of Whitelisted Crypto Companies

Russia Now Has a Registry of Whitelisted Crypto Companies

The Russian Association of Cryptocurrencies and Blockchain has created a registry of whitelisted companies that offer crypto-related products or services. Meanwhile, the bill to regulate cryptocurrencies in Russia has been delayed.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Whitelist of Crypto Firms

Russia Now Has a Registry of Whitelisted Crypto CompaniesThe Russian Association of Cryptocurrencies and Blockchain (RACIB) has created a whitelist of crypto companies. The list includes firms in the field of crypto mining, investment, marketing, legal, training, and initial coin offerings (ICOs).

Russia Now Has a Registry of Whitelisted Crypto CompaniesFrom early this year, legal entities and individuals in Russia have lost more than 270 million rubles [~US$4.3 million] from crypto-related investments organized by scammers and incompetent companies, RACIB detailed. The association has already started tracking unfair ICO projects and it hopes the registry will allow industry participants to find trustworthy partners in the space. RACIB elaborated:

The list of trusted companies will allow Russian and foreign market participants to base their work on trusted organizations and minimize the risk of fraud in the creation and development of Russian or foreign business in the field of mining, trading with cryptocurrency, blockchain technology and ICO.

Launched with 50 Companies

The association explained that the registry “consists exclusively of organizations that have undergone voluntary verification of reliability.” The criteria include “financial sustainability, experience and business reputation, lack of judicial judgments, availability of licenses and certificates (if necessary), [and] no arrears of taxes and fees.”

Citing that about 30 applicants are being verified, the association revealed:

At the moment, the registry includes more than 50 companies.

Russia Now Has a Registry of Whitelisted Crypto CompaniesThese companies are “trusted organizations which have already passed the verification procedure,” RACIB emphasized. Any legal entity in Russia wanting to be included can apply online. “The average period for document review is 10 days. At this time, third-party verification is not performed,” RABIC’s website states.

Additional testing and certification in three areas are already in the works, the association revealed. The first is a “certification for traders of crypto assets.” The second is a “certification for mining equipment suppliers” and the third is a “certification for mining farms.”

Russian Crypto Bill Delayed

The legal framework for the regulation of cryptocurrencies and ICOs in Russia is still in the preparation stage. The bill “On Digital Financial Assets” passed the first reading in the State Duma in May.

Russia Now Has a Registry of Whitelisted Crypto CompaniesLast year, Russian President Vladimir Putin ordered the regulation of cryptocurrencies and ICOs be finalized in July. However, Bankir wrote last week that the “consideration of draft laws on cryptocurrency was postponed to September.”

Elina Sidorenko, head of the State Duma’s interdepartmental working group responsible for a risk assessment on the turnover of cryptocurrencies, explained the delay in an interview with Hash Telegraph.

According to her, the Russian laws will be adopted after the “FATF [Financial Action Task Force on Money Laundering] standards are developed with respect to the risks of using cryptocurrency.” Without the FATF policies, it is difficult to adopt national legislation, she conveyed. The FATF draft document was expected to be considered at the session on June 27-29, “but in the end it was postponed to September,” Sidorenko detailed, elaborating:

Now in the State Duma there are several bills at once. And they are very different approaches to the definition of cryptocurrencies and tokens…The Central Bank believes that cryptocurrencies and tokens now do not have sufficient economic resources to function fully in free economic circulation.

What do you think of the Russian Association’s registry of whitelisted crypto companies? Let us know in the comments section below.


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Polish Bitcoin Association Seeks Protection from Alleged Banking Embargo

Polish BTC Association Seeks Protection From Alleged Banking Embargo

The Polish Bitcoin Association has reportedly appealed to Poland’s Office of Competition and Consumer Protection (OCCP) to protect the country’s cryptocurrency sector from what it perceives as a growing embargo targeting virtual currency businesses on the part of Polish financial institutions.

Also Read: The 2018 Crypto-Bear Market Less Severe Than 2014, At Least for Now

Polish Bitcoin Association Files Complaint with OCCP Against 15 Banks

Polish BTC Association Seeks Protection From Alleged Banking EmbargoThe Polish Bitcoin Association has accused a number of the country’s banks of seeking to restrict competition through refusing to provide financial services to cryptocurrency companies. The association recently filed a complaint with the OCCP requesting that the regulator launch an investigation into the alleged banking embargo, and impose penalties where appropriate..

The Polish Bitcoin Association’s complaint accuses “15 financial institutions” of refusing to provide bank accounts to 52 entities in the country’s nascent cryptocurrency sector, adding that said banks have also unfairly closed the accounts of a further 25 entities. The complaint describes mBank as having the most “disgraceful” record among Poland’s banks, alleging that the it has “made 9 refusals and closed 3 accounts.”

According to a rough translation of the complaint, “the effects of the banks’ actions described clearly aim at removing virtual currency entities from the market, despite the fact that such activities are legal and conducted with dignity. In view of the above, action by the regulators is necessary, and this notice and its requests are fully substantiated.”

No Polish Regulations Prohibit Cryptocurrency Trading

Polish BTC Association Seeks Protection From Alleged Banking EmbargoThe Polish Bitcoin Association asserts that the alleged restriction of financial services to cryptocurrency companies has occurred without a legislative mandate, emphasizing that there is no prohibitive regulatory regime concerning the exchange of cryptocurrencies.

Earlier this month, the Polish Financial Oversight Commission published a document seeking to clarify the legal status of cryptocurrency in the country, in which the watchdog stated that there are “no regulations prohibiting [the] trading […] of cryptocurrencies. The release also expressed the Polish Financial Oversight Commission’s intention to develop and introduce a regulatory apparatus pertaining to bitcoin and alternative cryptocurrencies during July.

Earlier this week, a survey conducted by Ipsos for ING found that Polish citizens are among the most virtual currency-savvy in Europe – with 77% of respondents expressing familiarity with cryptocurrency. The survey found only one European nation to produce a higher percentage of respondents that had heard of cryptocurrency, with 79% of Austrians found the have been familiar with virtual currency.

Do you think that Poland will adopt a permissive or prohibitive regulatory apparatus with regards to cryptocurrencies? Share your thoughts in the comments section below!


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Six Japanese Crypto Exchanges Respond to Regulator’s Improvement Orders

Six Japanese Crypto Exchanges Respond to Regulator's Improvement Orders

Six fully-licensed Japanese cryptocurrency exchanges have responded to the business improvement orders issued by the country’s top financial regulator. Two executives have also resigned from their positions as vice presidents of the recently formed crypto exchange association.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Japan’s top financial regulator, the Financial Services Agency (FSA), issued business improvement orders to six regulated crypto exchanges on June 22. Japan currently has 16 regulated crypto exchanges in total. Bitflyer, Bitpoint Japan, Btcbox, Bitbank, Quoine, and Tech Bureau received instructions to improve their crypto exchange businesses. Out of the six, only Tech Bureau has received two such orders.

Crypto Exchange Association

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersThe Japan Virtual Currency Exchange Association (JVCEA), founded in March, consists solely of the 16 government-approved crypto exchanges. It was formed in response to the hack of Coincheck in order to restore public trust in the industry.

The chairman of the association is Taizen Okuyama of Money Partners. There are four directors: Bitflyer’s Yuzo Kano, Bitbank’s Hiroyuki Noriyuki, SBI Virtual Currencies’ Yoshitaka Kitao, and GMO Coin’s Tomitaka Ishimura. While GMO Coin did not receive a business improvement order on the 22nd, it received one in March.

On Monday, June 25, the association announced that two of its vice chairmen have resigned, stating:

In response to the fact that vice chairmen of the association, Yuzo Kano and Hiroyuki Noriyuki, representative directors of Bitflyer Co. Ltd. and Bitbank Corporation, received business improvement orders concerning their virtual currency exchange businesses, we inform you that we have received resignation requests from both of the vice presidents on this date and have accepted them.

The association continued to detail, “we will continue to do our utmost to protect the interests of users and to promote the sound development of the virtual currency exchange industry, including the early establishment of voluntary regulation rules.” Prior to the two resignations, local media reported that the association was going to release self-regulatory rules this week; the association has not confirmed any specific details.

Crypto Exchanges’ Responses

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersJapan’s largest crypto exchange by volume, Bitflyer, announced on the same day as the FSA order its plans to improve a number of business areas. The exchange has also halted new user registrations and will strengthen its account verification process for existing users, as news.Bitcoin.com previously reported.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersBitbank explained that it is reviewing “the internal control system and management system” in order to “ensure proper and reliable operation of the business towards customers’ recovery of trust.” The exchange emphasized that there is no impact to customer assets. A sophisticated management system will be established as the company works closely with the authorities, the exchange elaborated:

There will be no impact on various services and customer assets provided by our company due to the business improvement order this time. You can use the service as usual for all transactions / functions including deposits and withdrawals of Japanese yen.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersBitpoint Japan wrote, “We sincerely apologize for any inconvenience caused to you and other concerned customers,” adding that it will “promptly enhance and strengthen the management control system.”

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersBtcbox similarly declared, “We take the situation sincerely, we deeply reflect on it,” noting that it will build a management system as directed by the FSA’s order.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersQuoine’s CEO, Mike Kayamori, detailed how his exchange will comply with the FSA order. He explained that the order is about “governance, compliance, back-office, KYC and AML,” not security or theft, elaborating: “we will need to pull out some necessary resources, especially from the back end developers who will need to provide the necessary data to comply and work with the FSA.” He further clarified that it means pulling “key people” away who are currently working on his exchange’s Liquid platform to work with the FSA instead, elaborating:

We believe this will be about a month or two process and business will be as usual.

Six Japanese Crypto Exchanges Respond to Regulator's Improvement OrdersZaif, operated by Tech Bureau, also responded, referencing the March business improvement order. In addition to complying with the previous order, two more areas will be improved. The first is the “Establishment of an effective risk management system” and the second is the “Establishment of a system to respond appropriately to customers.” The exchange wrote:

We sincerely accept that we received the improvement order again. To make it possible for customers to use it with confidence, we will endeavor to further improve and strengthen the organization and work together throughout the company so that we can establish an appropriate management system.

What do you think of the responses by the six Japanese crypto exchanges? Let us know in the comments section below.


Images courtesy of Shutterstock, Bitflyer, Bitbank, Bitpoint, Tech Bureau, Quoine, and Btcbox.


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Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and Digital IDs

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDs

The city of Zug, home of the Swiss Crypto Valley, will invite its residents to take part in an experimental blockchain-based vote. They are expected to share opinions on several questions of local importance, including the fireworks display during the annual Lakeside Festival and the use of digital IDs to borrow books and pay parking fees. This and other fintech and crypto-related stories from the Alpine nation and other corners of Europe are featured in today’s edition of Bitcoin in Brief.   

Also read: Bitcoin in Brief Tuesday: POT Saves World, Coinbase Pumps ETC, Binance Wants EUR

Zug Experiments with Blockchain-Based Vote

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDsAuthorities in the Swiss city of Zug plan to ask local residents to participate in a consultative blockchain-based vote this month utilizing the city’s electronic ID system. They will be able to vote via their smartphones by downloading and installing an app. The experimental vote will be held between June 25 and July 1. Citizens will be asked if they are in favor of setting alight fireworks during the annual Lakeside Festival, and whether they think digital IDs should be used to borrow books from the library, pay parking fees, and for identification on regular referendums.

According to Swissinfo, the results of the vote will be non-binding. Nevertheless, the initiative, which aims to test whether blockchain can be used on a broader scale, highlights again the positive attitude of Swiss authorities towards cryptocurrencies and the underlying technology. The canton of Zug, dubbed Switzerland’s Crypto Valley, has become home to many fintech startups and even established crypto companies like the Chinese giant Bitmain, which has opened an office there.

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDsFor some time now, Zug has been accepting cryptocurrency payments for municipal services, including company registrations using bitcoin and ether. The city introduced its eID system to provide citizens with digital access to council services. The pilot phase of the project started last fall. The system is based on blockchain technology.

New Swiss Body to Simplify Capital Markets

In another example of Switzerland’s serious approach to fintech innovations, leading representatives of the country’s financial, technological, academic and legal sectors have recently formed the new Capital Markets and Technology Association (CMTA) to facilitate the use of blockchain in financial markets. In a press release, they noted that “the blockchain technology has the potential to reduce the complexity of the capital markets system and lower the barrier of entry for startups.”

According to CMTA’s founders, the lack of legal certainty is slowing and can potentially compromise development in the field. They hope to facilitate access to funding for new businesses by defining a set of industry-supported open standards. These should ultimately contribute to value creation throughout the economy said Jacques Iffland, CMTA’s chair and partner at Lenz & Staehelin, the largest Swiss law firm.

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDs

Swissquote Bank Ltd, a leader in online banking, and Temenos, which specializes in banking software, are also behind the initiative. CMTA promises to work to create toolkits that can be used by new or established companies, businesses and startups to access funding and raise capital securely and efficiently, using new technologies and leveraging digitalization. The association is based in Geneva.

Irish Blockchain Startup Delivering Aid to Refugees Raises €1m

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDsAn Irish startup, using blockchain to facilitate the distribution of humanitarian aid, has raised an estimated €1 million from investors, according to industry sources quoted by The Irish Times. The Dublin-based Aid:tech is working in refugee camps, often in hotspots like the Middle East. On Wednesday, Enterprise Ireland and SGInnovate, the venture capital arm of the Singaporean development authority, announced simultaneous investments in the Irish company. This is the first time both state-backed organizations have allocated funds to support a blockchain business, the Irish daily notes. Amsterdam-based Blue Parasol Investments and Tin Fu Fund, a closed private equity fund managed by Shenzhen Capital Group, also took part in the funding round.

Aid:tech aims to increase transparency in the distribution of aid, welfare, remittances, donations, and healthcare services through digitizing their delivery using blockchain technology on its platform. According to the company, only a fraction of the estimated €306 billion (~$360 billion) transferred each year by non-governmental aid organizations is currently delivered via transparent systems which, the startup claims, are extremely expensive to administer. The blockchain technology employed by the Irish firm would allow all international aid to be accounted for, including the distribution of medicine, food and other essentials, the publication details.

Government-Backed Platform to Promote Ireland as a Blockchain Hub

In an attempt to highlight Ireland’s capabilities in the blockchain ecosystem, authorities in Dublin have launched a new government-backed platform. Blockchain Ireland, founded in partnership with a young company called Consensys, aims to create conditions for greater cooperation between startups working in the sector, both on national and international level. The platform was launched by the Irish Blockchain Expert Group and backed by Enterprise Ireland, the Irish Department of Finance, leading members of the country’s blockchain industry and representatives from a number of academic institutions.

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDs

The online platform is a source of useful information about the Irish blockchain ecosystem. It will be used to promote the country as a blockchain hub by highlighting the Irish technology sector and business environment which turn Ireland into an ideal location for blockchain-enabled business, Silicon Republic reports. The services it will be offering include providing information on setting up a new company and support for blockchain projects in Ireland. Its activities, however, will stretch beyond Irish borders. Blockchain Ireland will be working to develop the European and international blockchain ecosystem as well.

What are your thoughts on today’s topics in Bitcoin in Brief? Let us know in the comments below.


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SEC Chairman Applauds ‘Operation Crypto-Sweep’

SEC Chairman Applauds 'Operation Crypto-Sweep'

The chairman of the United States Securities and Exchange Commission (SEC), Jay Clayton, has issued a statement “applaud[ing]” the efforts of authorities associated with the North American Securities Administrators Association (NASAA) in executing the current “enforcement sweep targeting fraudulent ICOs and crypto-asset investment products.”

Also Read: 70+ Investigations: 40 Regulators Crack Down on Suspicious Crypto Schemes

SEC Chairman Commends Regulators Involved in ‘Operation Crypto-Sweep’

SEC Chairman Applauds 'Operation Crypto-Sweep'SEC chairman Jay Clayton has “applaud[ed]” his “fellow regulators in the United States and Canada who are coordinating and participating in efforts to police fraud in the Initial Coin Offering (ICO) markets.”

“The enforcement actions being announced by NASAA should be a strong warning to would-be fraudsters in this space that many sets of eyes are watching, and that regulators are coordinating on an international level to take strong actions to deter and stop fraud,” Mr. Clayton said.

The “efforts” referred to by Mr. Clayton have seen more than 40 North American state and provincial regulators participate in ‘Operation Crypto-Sweep’ – an “enforcement sweep” targeting fraudulent ICOs and crypto investment schemes which has resulted in over 70 investigations thus far.

NASAA Describes ICO Fraud as ‘Threat to Main Street Investors”

SEC Chairman Applauds 'Operation Crypto-Sweep'The SEC chairman sought to take a firm stance regarding the issuance of unlicensed securities through an ICO, stating that “When investors are offered and sold securities, whether through traditional channels or through an ICO on a sales-oriented website, state and federal securities laws apply. These laws have applied to our securities markets for over 80 years. At their core, these laws require full and fair disclosures of material information about both the securities and the venture being funded. Unfortunately, some market participants seem to believe that the use of new technology provides a basis for ignoring the core principles of our securities laws.”

Of Operation Crypto-Sweep, NASAA President and Director of the Alabama Securities Commission, Joseph Borg, recently stated: “The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the United States and Canada, and NASAA members are committed to combating this threat. Despite a series of public warnings from securities regulators at all levels of government, cryptocriminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams.”

What are your thoughts on Operation Crypto-Sweep? Share your thoughts in the comments section below! 


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New Self-Regulatory Rules for Crypto Exchanges in South Korea Clarified

New Self-Regulatory Rules for Crypto Exchanges in South Korea Clarified

The majority of South Korean cryptocurrency exchanges are implementing new self-regulatory rules and performing self-inspection. The industry group in charge of leading the efforts has clarified the differences between the new and old self-regulatory rules for its 23 exchange members.

Also read: Russian Regulators Draft Law to Restrict Crypto Mining, Payments, and Token Sales

Promoting Safe Crypto Trading

New Self-Regulatory Rules for Crypto Exchanges in South Korea Clarified
Jeon Ha-jin’s interview.

The Korean Blockchain Association, known for its efforts to spearhead self-regulation among the country’s cryptocurrency exchanges, has unveiled and clarified its self-regulatory rules.

In an interview with Asia Economic TV on Tuesday, Jeon Ha-jin, chairman of the association’s self-regulatory committee, explained how the group and its exchange members are in the process of implementing self-regulation, adding that in the future:

The role and responsibility of the blockchain association will be significant until a safe and sound cryptocurrency trading culture is formed.

New Self-Regulatory Rules for Crypto Exchanges in South Korea Clarified
Jeon Ha-jin explaining about self-regulation.

The rules were unveiled at a press conference last week by the association and 14 of its exchange members in an effort to “boost transparency of deals and head off money laundering, insider trading and other illegal deals,” the Korea Times reported.

Specifically, the rules suggest that crypto exchanges “(1) manage clients’ digital coins and their own separately (2) cope with abnormal transactions quickly (3) list new crypto with enhanced client protection system (4) hold a minimum equity of 2 billion won [~US$1.85 million] and (5) publish regular audit and finance reports,” the news outlet conveyed, adding:

The association will inspect the system of the 14 exchanges and nine newcomers to see if their systems meet the rules. But the inspection could have a limited impact because the rules are not legally binding.

Inspections will start on May 1 and the association will look into the exchanges’ systems “to check if there are loopholes that could be used for insider trading, price rigging and money laundering,” the publication detailed. “Members are supposed to submit self-inspection reports to the association by May 8.”

New vs Old Rules Clarified

Jeon explained on a show hosted by the same TV station the differences between the new and old self-regulatory rules introduced by the association.

New Self-Regulatory Rules for Crypto Exchanges in South Korea ClarifiedHe believes that “the government is now totally neglecting” small and medium-sized exchanges with the enforcement of the real-name system. Since it was implemented, banks have been reluctant to provide virtual account services to small and medium-sized exchanges, opting to only work with the country’s largest such as Upbit, Bithumb, Coinone, and Korbit.

Describing the association’s approach to self-regulation, Jeon said “First, we examined the differences [of the new rules] from the existing self-regulation.” He then clarified:

In the new self-regulation, the content of strengthening the transparency and security of cryptocurrency exchanges has been added. In order to prevent money laundering by the users of the exchanges, we have added a procedure to verify identity.

Furthermore, he emphasized, “From next year, we will be able to trade [with] only one account per person. It [is] also planned to preserve transparency by keeping transaction records for five years.”

Lawyer Jong Jae-jung said on the same TV show:

Considering the size of the cryptocurrency market, it is necessary to impose a null and void liability in the event of damages caused by hacking or the like. It is desirable to impose an insurance policy on capital adequacy through appropriate capital requirements.

What do you think of the new self-regulatory rules for South Korean crypto exchanges? Let us know in the comments section below.


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16 Government-Approved Crypto Exchanges Have Formed Self-Regulatory Group in Japan

16 Government-Approved Crypto Exchanges Have Formed Self-Regulatory Group in Japan

A new association has been registered in Japan consisting of 16 government-approved cryptocurrency exchanges. The group will focus on establishing self-regulatory rules and will have the authority to investigate and sanction members that do not comply with self-regulation.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

New Japanese Crypto Association

A new cryptocurrency organization has been registered with the Japanese Financial Services Agency (FSA), consisting of 16 crypto exchanges that have been approved by the agency, according to local media.

16 Government-Approved Crypto Exchanges Have Formed Self-Regulatory Group in JapanThe Japan Virtual Currency Exchange Association recently held a general meeting, during which a director was chosen, Jiji Press reported.

The group plans to “elect Taizen Okuyama, President of Money Partners as Chairman” at the next Board of Directors meeting which will be held on April 23. The association will be formally launched on that date.

The news outlet quoted the new group explaining that they aim to establish rules for their member exchanges, and as an organization, will have the “authority to investigate and banish member companies.”

Founding Members

The Japan Virtual Currency Exchange Association’s founding members are the 16 fully licensed exchanges operating in Japan. They are Bitflyer, Money Partners, Bitbank, Bitpoint, Quoine, SBI Virtual Currencies, Fisco Virtual Currency, Btcbox, Zaif, GMO Coin, Bittrade, Tokyo Bitcoin Exchange (DMM Bitcoin), Bitarg Exchange Tokyo, FTT Corporation, Xtheta Corporation, and Bitocean.

16 Government-Approved Crypto Exchanges Have Formed Self-Regulatory Group in JapanJapan already has two existing associations in the crypto space: the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA). The former is headed by Bitflyer CEO Yuzo Kano and the latter by the president of Money Partners Group.

The new association will be a member of both the JBA and the JCBA, both of which will continue to operate, according to the news outlet. Some crypto exchanges are members of both associations, such as GMO Coin and Coincheck.

While all members of the new association are FSA-approved exchanges, members of the JBA and the JCBA also include “deemed dealers,” which are exchanges the agency allows to operate while their registrations are under review. Coincheck, which was hacked in January, falls into this category.

The FSA is currently strengthening its rules for deemed dealers. Masashi Nakajima, Professor at Reitaku University, who participates in the agency’s research group, pointed out that most users did not know that Coincheck was unlicensed, Sankeibiz conveyed. “I ask for a mechanism that is easy to recognize at a glance” to indicate that an exchange is still unlicensed such as a posting on the exchange’s website, he was quoted.

Do you think this new association will help the crypto ecosystem in Japan? Let us know in the comments section below.


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Japanese Crypto Associations Merging to Restore Trust Across the Industry

Japanese Crypto Associations Merging to Restore Trust Across the Industry

Japan’s two cryptocurrency associations have reportedly decided to merge in order to restore trust in the industry and accelerate self-imposed rules. Once approved by the Japanese financial regulator, the new organization will have the power to set penalties for breaches of self-regulation.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Two Crypto Associations Merging

Japan currently has two cryptocurrency industry associations: the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA). The former is headed by Bitflyer CEO, Yuzo Kano, and has a total of 88 members, while the latter has a total of 154 members, according to Minkabu publication.

Japanese Crypto Associations Merging to Restore Trust Across the IndustryThe two organizations have reportedly been in talks to merge after the hack of one of the country’s largest exchanges, Coincheck, where 58 billion yen worth on the cryptocurrency NEM were stolen. They “are hurried to restore trust in the industry,” Forbes Japan reported.

They “will be integrated to establish a new self-regulating organization,” to focus on areas such as safety management system and compensation of customer assets, the news outlet added. In addition, the new entity will also focus on the reliability of crypto exchanges that have already been approved by the Japanese Financial Services Agency (FSA). Currently, there are 16 approved exchanges and 16 under review, including Coincheck.

On Thursday, Nikkei reported:

Two cryptocurrency industry groups in Japan [JBA and JCBA] have agreed to merge in an effort to accelerate the establishment of voluntary regulations and regain public trust in the aftermath of a massive virtual currency heist.

Set to launch on April 1, “The new organization’s chairman will likely be JCBA Chairman Taizen Okuyama, president of Money Partners Group,” the news outlet detailed, adding that Kano is “expected to become the self-regulatory body’s vice chairman.”

Commenting on the news of its merger with the JBA, the JCBA issued a statement on Thursday, stating that no details have been decided at this time.

Accelerating Self-Regulations

Japanese Crypto Associations Merging to Restore Trust Across the IndustryThe new entity will need the approval of the FSA. Under Japan’s revised payment services law which went into effect in April of last year, cryptocurrency operators are allowed to form a self-regulatory organization. They can “set industry rules, conduct investigations on members, and impose punishment,” the Japan Times elaborated.

However, the FSA previously “refused to allow two self-regulatory bodies, urging the industry to create a unified organization by merging the JBA and the JCBA,” Nikkei explained on Thursday, adding that:

Once the new body is approved by the agency, it will gain the power to set penalties for breaches of its self-imposed rules. This should also help address calls by banks and other businesses in the conventional financial industry for virtual currency businesses to establish a robust self-regulatory regime.

Do you think the merger will help the crypto industry gain more of the public’s trust? Let us know in the comments section below.


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Japanese Crypto Exchanges Strengthen Self-Regulation Following Coincheck Hack

Japanese Crypto Exchanges Strengthen Self-Regulation Following Coincheck Hack

Japanese cryptocurrency exchanges are strengthening their self-regulation procedures following the hack of one of the country’s largest crypto exchanges, Coincheck. The Japanese Financial Services Agency has yet to approve Coincheck’s registration as a crypto exchange.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Strengthening Self-Regulation

Japanese Crypto Exchanges Strengthen Self-Regulation Following Coincheck HackThe Japan Blockchain Association (JBA) has previously established self-regulation standards which its cryptocurrency exchange members voluntarily adopt. The standards include “the maintenance of cold wallet, etc., under the consent of the related members,” the association announced on Saturday after one of its members, Coincheck, suffered a hack which led to an approximately 58 billion yen loss on its platform.

The association currently has 127 members, 15 of them are crypto exchange members and 35 are blockchain members. Among crypto exchange members are Bitflyer, Coincheck, GMO Coin, and Bitocean. Bitflyer CEO Yuzo Kano is the association’s representative director. According to the JBA’s announcement:

The fact that the maintenance of the cold wallet was delayed caused the current illegal outflow. It is very regrettable.

Japanese Crypto Exchanges Strengthen Self-Regulation Following Coincheck HackThe association noted that the Japanese Financial Services Agency (FSA) has alerted the representatives of each cryptocurrency exchange regarding their security. “We are looking for further measures,” the JBA emphasized, adding that its crypto exchange members have been told to “check the status of [their] security based on the possibility of cyber attack.” The association noted:

In the future, in order to appropriately secure the security of virtual currency exchange traders…we will establish stricter voluntary regulations and seek compliance with members.

FSA’s Concerns About Coincheck

According to Japan Times, the FSA had urged Coincheck to “address security concerns about the way it manages customer assets before Friday’s ¥58 billion theft of NEM tokens.” The publication quoted informed sources asserting:

As part of questionnaires issued in late August, the FSA asked exchange applicants how their assets were distributed in the two types of accounts [cold and hot wallets]…After the company [Coincheck] filed for registration in September, the FSA highlighted the risk of unauthorized accesses taking place in its computer system and urged it to strengthen security.

The financial authority usually takes two months to approve an application for a cryptocurrency exchange, the news outlet noted, pointing out that Coincheck’s application has already been under review for four months after its filing.

According to Reuters, the FSA has ordered Coincheck to submit “an incident report and measures for preventing a recurrence” by February 13. In addition, the agency may “conduct on-site inspections of other exchanges,” the news outlet noted. Furthermore, the Tokyo Metropolitan Police Department will launch an investigation into the exchange’s hack.

What do you think of Japanese exchanges’ self-regulation and Coincheck hack? Let us know in the comments section below.


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Growing Number of South Korean Crypto Exchanges Participate in Self-Regulation

Growing Number of South Korean Cryptocurrency Exchanges Participate in Self-Regulation

The number of cryptocurrency exchanges participating in self-regulation has nearly doubled in South Korea. The crypto self-regulation efforts are led by the Korean Blockchain Association which has recently launched with 66 members. The association also plans to develop standard price indices for the main cryptocurrencies.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

25 Crypto Exchanges to Self-Regulate

The Korean Blockchain Association has been leading the cryptocurrency self-regulation efforts in South Korea. The group formally launched on January 26 with 66 members, local media reported. Among its members are 25 crypto exchanges including all of the country’s major platforms such as Upbit, Bithumb, Korbit, Coinone, and Coinplug.

Growing Number of South Korean Cryptocurrency Exchanges Participate in Self-Regulation
Chin Dae-jae.

An inaugural ceremony for the launch was held at the Yeouido National Assembly Hall in Seoul. It was attended by 58 out of 66 member companies along with Min Byung-Doo, a member of the Democratic Party, and Kim Sung-tae, a member of the Free Korean Party, Inews24 reported.

Former South Korean Minister of Information and Communication, Chin Dae-jae, became the first chairman of the association. Top Star News quoted him saying, “The public interest in cryptocurrencies represented by bitcoin has soared, and the excessive speculative funding has flowed into exchanges. It’s our reality now.” He emphasized, “The association wants to be an effective communication channel between the government and the industry.”

During the first half of the year, the association “plans to create an information system that allows the public to easily understand virtual currency,” Chosun detailed, adding that:

The association also plans to develop a standard index of key virtual currency prices and transaction data…The intention is to provide credible information as standard transaction data.

Growing Number of South Korean Cryptocurrency Exchanges Participate in Self-Regulation
The Korean Blockchain Association’s launch event.

Self-Regulation for Korean Exchanges

Growing Number of South Korean Cryptocurrency Exchanges Participate in Self-RegulationPrior to its official launch, the association initially announced self-regulatory measures in December, at the suggestion of the regulators and in consultation with the banking sector. Fourteen cryptocurrency exchanges jointly declared self-regulation at that time, including all major crypto exchanges in the country except Upbit, as news.Bitcoin.com previously reported. The Kakao-backed exchange, which has grown to be one of South Korea’s largest exchanges, joined the association and declared self-regulation in January.

The association has established a self-regulatory committee to work with cryptocurrency exchanges. Chin was then quoted by Chosun:

I will launch a self-regulation review in the first half of the year.

He further noted, “We will study the Japanese regulatory framework and make sure that the entire ecosystem is stable.” In addition, he elaborated, “I will also take the initiative to create an environment where investors can learn how to use virtual currency,” Maekyung reported.

According to the Hankyoreh, the association’s self-regulatory measures will “include minimum operating requirements such as the capital base of virtual currency exchanges, employee ethics regulations, and consumer protection.”

What do you think of Korean crypto exchanges declaring self-regulation? Let us know in the comments section below.


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