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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Bitflyer Cracks Down on Market Manipulation – Coincheck Eyes August Relaunch

Bitflyer Cracks Down on Crypto Market Manipulation, Coincheck to Reopen in August

Japan’s largest crypto exchange, Bitflyer, may freeze accounts caught manipulating prices. Meanwhile, GMO Internet has released quarterly earnings for its crypto exchange subsidiary, currently looking to borrow some BTC from customers. In addition, Coincheck plans to reopen next month after it was hacked earlier this year.

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

Bitflyer Cracks Down on Market Manipulation

Bitflyer Cracks Down on Crypto Market Manipulation, Coincheck to Reopen in AugustBitflyer, Japan’s largest cryptocurrency exchange by volume, still does not accept new account signups. The exchange made this decision voluntarily after receiving a business improvement order from the country’s top financial regulator, the Financial Services Agency (FSA). Bitflyer announced Thursday:

In accordance with our Terms of Use, we may freeze accounts observed to have intentionally performed market manipulation or other forms of maliciously setting market prices. We will continue to do our best to build a sound trading environment.

The business improvement order Bitflyer received contains 10 “measures to ensure Bitflyer Cracks Down on Crypto Market Manipulation, Coincheck to Reopen in Augustappropriate and reliable business operation,” the FSA detailed. Five other exchanges received an improvement order at the same time. However, unlike Bitflyer’s, theirs contain fewer than ten items and do not include a “drastic review of the management system.”

Bitflyer has been delaying deposits and withdrawals as it tries to comply with the FSA’s order. Then, on July 23, the exchange submitted its improvement plan to the agency.

GMO Coin Wants to Borrow BTC Now

Bitflyer Cracks Down on Crypto Market Manipulation, Coincheck to Reopen in AugustJapanese internet giant GMO Group released its quarterly earnings on Thursday. The company recorded operating income for its crypto business in the second quarter after making a loss in the first due to sharp drops in crypto prices, GMO explained, adding:

In the virtual currency business, the number of account openings grew steadily due to aggressive promotion activities … Operating revenue in this segment was 1,612 million yen [~US$14.5 million], operating loss was 258 million yen [~$2.3 million].

Meanwhile, GMO Coin, the crypto exchange unit of GMO Internet, is currently accepting applications from customers wanting to loan the company their BTC. Customers can apply between July 24 and August 6. The minimum GMO will borrow is 10 BTC and the maximum is 200 BTC. The exchange first announced the launch of this program in May.

Coincheck to Reopen in August

Bitflyer Cracks Down on Crypto Market Manipulation, Coincheck to Reopen in AugustSince its hack in January, Coincheck has suspended new account registrations. Monex Group’s president, Oki Matsumoto, said Friday that he expects to relaunch Coincheck in August, local media reported.

The group acquired Coincheck in April after it was hacked in January. According to Monex Group’s financial results from April to June, Coincheck made a pre-tax loss of 259 million yen (~$2.33 million).

Matsumoto elaborated:

I would like to restart full Coincheck service in August … The management system of Coincheck has greatly improved with the entrance of Monex Group.

Meanwhile, Monex is also trying to enter the crypto market through its US subsidiary, Tradestation Group.

What do you think of Bitflyer’s crackdown, GMO Coin’s performance and BTC loan program, and Coincheck’s relaunch? Let us know in the comments section below.


Images courtesy of Shutterstock, Bitflyer, Coincheck, and GMO Coin.


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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.


Images courtesy of Shutterstock and the FSA.


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$731 Million Stolen from Crypto Exchanges in 2018: Can Hacks be Prevented?

Blockchain security firm CipherTrace recently reported that $731 million worth of cryptocurrencies were stolen from crypto exchanges during the first half of 2018. Last year, crypto exchanges recorded around $266 million in losses from security breaches and heists. The first half of 2018 recorded triple the amount stolen from crypto exchanges in 2017, triggering investors

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Report Reveals Phishing Trends Using Japanese Language for the First Time

Report Reveal Phishing Trends Using Japanese Language for the First Time

Reports have confirmed that Japan has been targeted by cybercriminals using phishing, or illegal acquisition of personal information, to steal cryptocurrencies by sending fake emails to crypto exchange users. Fake emails sent in Japanese language reportedly rose to at least 1,500 by last autumn.

Also Read: How Michael Richo Stole Bitcoins via Imposter Exchange Sites and Dark Web Phishing Schemes

Six FSA Approved Exchanges Taking Inadequate Countermeasures Against Phishing

Back in May, Bitflyer was warning its customers that fake emails used by cybercriminals were redirecting their victims to phishing websites that looked like authentic Bitflyer pages, which requested customers to enter their IDs and passwords. These were then collected by the criminals. Bitflyer received a serious business improvement order by the FSA on June 22.

Fake emails in Japanese language sent to steal private information were confirmed last November

A report published by the University of Tsukuba and Nomura Asset Management, an investment management company, criticized six government approved crypto exchanges saying they were operating without any solid countermeasures against online fraud and phishing schemes.

The Japanese Anti-phishing Council and the information security company Trend Micro reported that it was in November of last year that fake emails sent in the Japanese language targeting cryptocurrencies were confirmed for the first time. The two entities confirmed more than 1,500 fake emails sent in Japanese, targeting cryptocurrency exchanges. “And this is just the tip of the iceberg,” they said.

Government Collaboration is Planned

Japan Credit Information Service’s (JCIS) spokeswoman Teruko Suzuki told news.Bitcoin.com that JCIS has collaborated several times with the Japanese government regarding investigations on cryptocurrency related matters, but JCIS hasn’t got any official contract with government entities yet. “We are hoping to collaborate with the Japanese government entities such as the FSA, the National Police Agency, The Tokyo Metropolitan Police, or even the tax office in the future.”

In January this year, about 580 billion JPY worth of the virtual currency NEM vanished from Coincheck, a major domestic crypto exchange. In this case, fraudulent emails were sent in English to several employees of the company. It was later revealed that they were infected with viruses after opening those emails. After this major Japanese crypto heist, the FSA has been strictly inspecting Japanese crypto exchanges and reported a series of deficiencies in the internal management system, one after another.

Do you think enough is being done by officials to crack down on cryptocurrency phishing? Let us know in the comments section below.


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Japan’s Crypto-Friendly Regulator to Leave in Summer, What Will Change?

Nobuchika Mori, Japan’s longest-serving regulator and chief of Japan’s Financial Services Agency (FSA) who is responsible for most of the crypto regulations imposed by the Japanese government, is expected to leave this summer, according to FT. Mori’s Forward-Thinking Approach For many years, with strict capital controls and money laundering policies, Japan has always been known

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All Regulated Japanese Exchanges to Prohibit Insider Trading and Privacy Coins

All Regulated Japanese Exchanges to Self-Prohibit Insider Trading and Privacy Coins

The association comprising of 16 government-approved cryptocurrency exchanges in Japan has reportedly provided a sneak peak of its self-regulatory rules. The focuses are on banning insider trading and preventing exchanges from listing privacy coins.

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

Insider Trading Banned

The Japan Virtual Currency Exchange Association (JVCEA) has given a sneak peak of the draft self-regulatory rules it has been working on, “in an effort to step up consumer protections and improve transparency,” Nikkei reported on Monday. The main focuses of the new regulations are on “insider trading and the trading of new currencies that cannot be traced easily,” the publication detailed, adding:

The proposed rules explicitly ban insider trading. Word has leaked previously that a major exchange would start handling a new currency, which led to a surge in the currency’s value and left many suspecting market manipulation. Such activity would represent a clear violation of the new rules.

All Regulated Japanese Exchanges to Self-Prohibit Insider Trading and Privacy Coins
Representatives of the JVCEA.

Privacy Coins and Other Restrictions

Previously, news.Bitcoin.com reported that the country’s top financial regulator, the Financial Services Agency (FSA), had pressured exchanges to drop privacy coins. Nikkei soon reported that the agency intended to introduce a rule banning them. Subsequently, Coincheck delisted XMR, DASH, and ZEC.

According to the news outlet, the JVCEA has also introduced its own rules on privacy coins, stating:

The association also wants to prohibit exchanges from accepting new currencies that cannot be traced to previous sellers, since such currencies could easily be used for money laundering and are hard to monitor. Highly anonymous coins like Monero, Dash and Zcash could be forced out of the mainstream.

In order to prevent another Coincheck incident, crypto exchanges must better protect customer assets and report audit results to the association. “Customers’ private keys, which are needed to complete transactions, must also be managed offline to minimize hacking risk,” the publication described.

Furthermore, “exchanges will be required to keep their quoted rates from widely deviating from the prevailing market rates. Exchanges would also need to introduce circuit breakers to halt trading should a currency’s value suddenly surge or plunge.”

Strict and Costly Compliance All Around

Following the hack of Coincheck in January, the FSA has tightened its oversight of crypto exchanges including imposing stricter registration requirements and on-site inspections.

All Regulated Japanese Exchanges to Self-Prohibit Insider Trading and Privacy CoinsThe agency has handed out a number of business improvement orders as well as suspended a few exchanges. Out of the 16 registered exchanges, only two were issued business improvement orders – GMO Coin and Tech Bureau. Prior to the Coincheck hack, Japan had 16 “deemed dealers” or those exchanges which were allowed to operate while their applications are pending. However, since the FSA started strengthening its rules, eight of them have indicated that they will withdraw their applications.

All Regulated Japanese Exchanges to Self-Prohibit Insider Trading and Privacy Coins
Taizen Okuyama.

The JVCEA was established in March, also in response to the Coincheck hack, in order to regain public trust in the crypto industry. The association consists of the 16 government-approved crypto exchanges. The chairman and president of the organization is Taizen Okuyama of Money Partners. Bitflyer CEO Yuzo Kano is the Vice Chairman, along with Bitbank President Noriyuki Hiroeno. The other two directors are SBI Virtual Currencies’ Yoshitaka Kitao and GMO Coin’s Tomitaka Ishimura.

In addition to the JVCEA, Japan already has two older associations: the Japan Blockchain Association (JBA) and the Japan Virtual Currency Business Association (JCBA).

According to the news outlet, the JVCEA has drawn up nearly 100 pages of self-regulatory measures which could be costly for crypto exchanges to comply with. An official at one exchange was quoted saying:

We’re being subjected to rules almost as tough as the Financial Instruments and Exchange Act.

What do you think of the association’s self-regulatory rules? Let us know in the comments section below.


Images courtesy of Shutterstock and the JVCEA.


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Korean crypto exchange Coinrail loses over $40M in tokens following a hack

Another day, another crypto hack. This time it’s Korea, the crypto-mad Asian country, where an exchange called Coinrail lost more than $40 million in altcoins, ICO-issued tokens that aren’t bitcoin or Ethereum, after it was hit by an apparent attack over the weekend.

Korea may be a hot spot for crypto investment, but Coinrail is one of its smaller exchanges, just about ranking inside the world’s top 90 based on trading volume, according to coinmarketcap.com. Nonetheless, even the smaller exchanges have plenty of coins, as the size of this heist illustrates.

Most notably, the hackers got away with $19.5 million-worth of NPXS tokens that were issued by payment project Pundi X’s ICO. Added to that they scored a further $13.8 million from Aston X, an ICO project building a platform to decentralize documents, $5.8 million in tokens for Dent, a mobile data ICO, and over $1.1 million Tron, a much-hyped project originating from China.

That’s according to a wallet address that has been identified as belonging to the alleged attacker, who also got hold of smaller volumes of a further five tokens from Coinrail.

In all the cases, the companies issuing the tokens themselves were not hacked, the tokens that were nabbed belong to Coinrail users.

It isn’t clear how, or indeed whether, Coinrail will go about compensating its customers — Japan’s Coincheck refunded its customers following a high-profile attack earlier this year — but some of the ICO projects are taking steps in response.

Pundi was hit the hardest, claiming that some three percent of its total volume of tokens was impacted by this attack. It said it has frozen the tokens that were stolen and it has ceased trading of its tokens across all exchanges to help with the post-attack investigation, which it said includes the Korean police. NPER, which had around $860,000-worth of tokens taken from Coinrail, said it had frozen the stolen funds and it plans incinerate the tokens to render them useless to the hacker. Aston has also frozen its affected tokens, according to Coinrail.

Other projects have yet to comment, although Coinrail said in a statement on its website that two-thirds of the stolen tokens have been frozen with more action likely to happen.

Coinrail took its service offline and it said in a statement that it has moved the remainder of its assets — which it said is 70 percent of its total holdings — to cold storage while it reviews its security system and fully investigates the incident.

Some have suggested that the hack was responsible for bitcoin’s valuation dropping by over five percent in what is the cryptocurrency’s biggest decline for two weeks. However, Coinrail is so obscure that this theory seems unlikely.

What is for certain is that the hack serves as another strong reminder that the space remains unregulated — there’s with little recourse for victims of a crypto exchange hack, unlike say a bank robbery or payment fraud. More importantly, those who do buy bitcoin, Ethereum or other crypto tokens should keep their tokens securely in a private wallet (ideally using a hardware device for access) rather than leaving them within an exchange where they could be stolen.

For those of you keeping score on recent hacks on exchanges, here are a few: Coincheck lost an estimated $400 million earlier this year, last November saw Tether claim it lose $31 million following an attack while EtherDelta suspended its exchange service for a period in December after it was compromised.

The Mt. Gox hacking in 2014 is the mother of all crypto attacks, of course. In total the exchange lost around 744,408 BTC. That was worth around $350 million at the time, but today a holding of that size would be valued at some $5.3 billion.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Lawsuit Brewing Against Crypto Exchanges in Japan Over Withheld Forked Coins

Lawsuit Brewing Against Crypto Exchanges in Japan Over Withheld Forked Coins

A class action lawsuit is being prepared by a group of lawyers in Japan over forked coins that cryptocurrency exchanges are not granting to their customers. Citing that these coins belong to the customers, the group seeks to change the business practices of crypto exchanges and obtain the forked coins for the plaintiffs.

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

Class Action Lawsuit Over Forked Coins

A group of lawyers is preparing a class action lawsuit against the majority of crypto exchanges in Japan for withholding customers’ forked cryptocurrencies. They have formed a litigation counsel seeking to represent crypto holders nationwide in obtaining their forked cryptocurrencies from exchanges. The group announced on Thursday, May 31:

This is to bring back the virtual currency (hard fork coins) that most exchanges do not grant to the original owners.

“The virtual currency you deposit at an exchange should not belong to the exchange, but to the user,” the lawyers explained on their website created for traders to join the lawsuit, emphasizing that the exchanges currently judge for themselves whether to give these coins to customers.

Lawsuit Brewing Against Crypto Exchanges in Japan Over Withheld Forked CoinsIf they decide not to grant these coins to customers, then these “forked coins will be that of the exchanges, [and] the exchanges will be free to use them and make them profitable,” the group detailed.

In addition, if they decide to grant these coins to customers after a considerable amount of time, then users cannot benefit during that period, but “the exchanges can raise their operating profits [with the coins] during that period.”

Citing that there is no legal basis for handling hard forks, the lawyers stated that it is “unhealthy” how the exchanges currently judge whether to grant customers their forked coins, adding:

If you deposit a virtual currency at an exchange, your contract with the exchange will be similar to a bank deposit. Therefore, [when] the deposited virtual currency is hard forked, the forked coins generated by the division are considered to belong to you, not to the exchange. In other words, it is a natural interpretation that exchanges have an obligation to grant this.

According to Forkdrop.io, there have been 110 forked coins; BTC has been forked 70 times.

Lawsuit Brewing Against Crypto Exchanges in Japan Over Withheld Forked Coins
Examples of forked coins.

Participating Lawyers

Five lawyers are participating in this lawsuit: Masaki Yoshida, Miki Fukuda, Kenzo Nakamura, Taiji Jonnouchi, and Koizumi Makoto. Their website also states, without further elaboration, that “Participation from overseas is also possible.”

Lawsuit Brewing Against Crypto Exchanges in Japan Over Withheld Forked Coins
Five participating lawyers.

The lawyers say that they have received requests regarding forked coins from a group of plaintiffs. After investigating the situation, they found a considerable legal problem in dealing with exchanges over obtaining forked coins.

This is not the group’s first legal case concerning cryptocurrencies. Their announcement reveals that they previously filed a lawsuit against Coincheck in the Tokyo district court after it was hacked in January.

For the hard fork lawsuit, the group’s fee is 20% of the forked coins if there is a winning judgment or settlement, the website detailed and quoted Yoshida saying (loosely translated):

We formed this lawyer [group] to pursue changes of business practices pertaining to virtual currency trading.

What do you think of this lawsuit? Do you think it will be successful? Let us know in the comments section below.


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South Korean Crypto Exchange Korbit Drops XMR, ZEC, DASH, REP, and STEEM

South Korean Crypto Exchange Korbit Drops XMR, ZEC, DASH, REP, and STEEM

South Korean cryptocurrency exchange Korbit has announced that it will no longer support the trading of five cryptocurrencies: dash, monero, zcash, augur, and steem. This announcement came just days after hacked Japanese exchange Coincheck confirmed the delisting of privacy coins.

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

Farewell to Five Cryptocurrencies

South Korean Crypto Exchange Korbit Drops XMR, ZEC, DASH, REP, and STEEMKorbit, one of South Korea’s largest cryptocurrency exchanges, announced this week that it will be delisting the cryptocurrencies currently offered through its Other Digital Assets service.

“We will bid farewell to the Other Digital Assets service through a gradual termination of the buy and sell functions for the following coins,” Korbit wrote, adding that the affected coins are dash (DASH), monero (XMR), zcash (ZEC), augur (REP), and steem (STEEM).

This service gives Korbit users access to the above five cryptocurrencies in addition to those regularly supported by the exchange: BTC, XRP, ETH, BCH, ETC, LTC, and BTG.

South Korean Crypto Exchange Korbit Drops XMR, ZEC, DASH, REP, and STEEM

For the five affected cryptocurrencies, Korbit emphasized that the buy functionality will be terminated “After 15:00 on 05/28/2018” and the sell functionality “After 15:00 on 06/21/2018.” However, the exchange hinted at the possibility of re-listing some of them at a later date, elaborating:

We strive to facilitate secure trades of more cryptocurrencies, but we have yet to determine the date for resumption of trades of the affected coins. We thus advise you to protect your interests by either selling or withdrawing the said cryptocurrencies.

Reason for Termination

Korbit’s announcement does not give the reason why the five cryptocurrencies are being dropped other than stating, “We are fully committed to building the most secure place for you to trade cryptocurrencies.”

South Korean Crypto Exchange Korbit Drops XMR, ZEC, DASH, REP, and STEEMFurthermore, there have been no reports of the South Korean regulators pressuring crypto exchanges to drop privacy coins, unlike the Japanese regulator.

Since Coincheck was hacked in January, the Japanese Financial Services Agency (FSA) has strengthened oversight of crypto exchanges including setting new criteria for their registration. One of them concerns the types of cryptocurrencies listed. “Those granting a high level of anonymity and easily used for money laundering will as a general rule be banned,” Nikkei reported.

South Korean Crypto Exchange Korbit Drops XMR, ZEC, DASH, REP, and STEEMSubsequently, Coincheck announced just days before Korbit that it is dropping DASH, XMR, ZEC, and REP after it received a business improvement order from the agency. STEEM is not listed on Coincheck.

The reason Korbit is dropping STEEM may be related to a notice the exchange posted on May 8, stating:

Due to external issues, STEEM withdrawals are being suspended indefinitely.

What do you think of Korbit dropping these cryptocurrencies? Let us know in the comments section below.


Images courtesy of Shutterstock, Nikkei, and Korbit.


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Coincheck to Delist Privacy Coins Monero, Zcash, and Dash

Japanese cryptocurrency exchange Coincheck has will delist trading pairs for privacy-centric cryptocurrencies monero (XMR), zcash (ZEC), and dash (DASH) next month. The Tokyo-based exchange, which was purchased by brokerage firm Monex following a high-profile January hack that saw the platform lose $530 million in NEM tokens (XEM), announced on Friday that it will no longer

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Japanese Exchange Coincheck Eyes America for Expansion

Japanese Exchange Coincheck Eyes America for Expansion         

Coincheck, the Japanese crypto trading platform that found new owners after it was hacked earlier this year, is now planning to offer services on the US market. The exchange expects to be licensed in Japan next month, according to the chief executive of Monex, the online brokerage which bought the troubled company last month.    

Also read: Coincheck Resumes Monero Withdrawals and Sales

Coincheck’s US Plans – Part of the Comeback

Japanese Exchange Coincheck Eyes America for ExpansionRecognizing the need to “study carefully” the legal framework for cryptocurrencies in the US, Japanese exchange Coincheck is planning to expand its operations and its customer base in America, building on top of over 2 million accounts in Japan. No timeframe has been specified yet, but the move is under consideration by the platform’s new management. Its operator, Coin Check Co., became a wholly owned subsidiary of Monex Group in April after losing some ¥58 billion worth of NEM (~$550 million USD at the time) in a hacker attack in January – one of the biggest heists in crypto history.

“The legal framework for cryptocurrency in the US is somehow wandering right now – money transfer, commodity, security. And, the rules are different state by state. So, we have to study this carefully. But the short answer is ‘yes’,” Monex CEO Oki Matsumoto told Bloomberg in an interview about Coincheck’s future intentions. He also revealed that the exchange, which spent a lot of funds and efforts to improve security and restore confidence, is expecting to receive a license in Japan next month. Matsumoto’s comments indicated that bringing the trading platform to the US is also part of the plans for the comeback.

Japanese Exchange Coincheck Eyes America for Expansion

For many observers, the purchase of the notoriously hacked cryptocurrency exchange for $34 million might have looked like a risky investment, but the takeover has so far proven to be a positive move for Monex. Its shares have almost doubled in price since the news of the acquisition broke in April. Doing crypto business in the US may not seem like a great idea either, given that the company comes from Japan, a country known for its much friendlier crypto atmosphere.

A Different Perspective of the West

Matsumoto, however, has a different reading of the situation as he sees favorable conditions forming in the West, including lower taxes and growing interest from institutional money managers. France was mentioned in the interview in the light of last month’s government decision to lower the crypto capital gains tax rate by more than half – to 19 percent, compared to Japan’s 55 percent.

Japanese Exchange Coincheck Eyes America for ExpansionAnother sign of the warming climate in Paris was the Finance Minister Bruno Le Maire’s statement this week that he was wrong about cryptocurrencies before. “I was a neophyte a year ago, but now I’m passionate. It took me a year, so let’s […] make France the first place for blockchain and crypto innovation in the EU,” Le Maire was quoted as saying at a meeting with entrepreneurs and representatives of the French startup Blockchain Partner. According to Bitcoin.fr, he also assured the members of the French crypto community of his “total support.”

The Japanese government does not plan any tax cuts for crypto-related incomes and gains and that, according to Oki Matsumoto, means that cryptocurrency will remain a “plaything for speculators.” Despite legalizing crypto trade last year, Tokyo has yet to determine the status of crypto-related financial products such as futures contracts, which will require some amendments to the Japanese securities law.

“Japan may seem like it’s one step ahead in crypto, but in terms of deciding what’s a security or a token, and in terms of attracting institutional investors, the US and Europe are moving ahead,” the chief executive of Monex said. In his opinion, the classification of cryptocurrencies in the United States will create regulatory clarity which is necessary to draw more investors. Matsumoto believes that the decisions US regulators take will influence the role of cryptocurrencies, in general, and have a huge impact on the crypto policies in his country, in particular.

What are your expectations for the future of crypto industries in both Japan and the US? Share your thoughts in the comments section below.  


Images courtesy of Shutterstock.


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The post Japanese Exchange Coincheck Eyes America for Expansion appeared first on Bitcoin News.

Coincheck Plans to Expand into US Market

Coincheck will expand into the US

Monex Inc., the new owner of the cryptocurrency exchange Coincheck, has announced that Coincheck will expand into the US.

Monex acquired Coincheck back in April, not long after Coincheck experienced one of the largest crypto hacks of all time. Coincheck has been working to recover ever since but hasn’t fully succeeded yet. Now, in the hopes of helping the exchange to recover further, Monex plans to expand Coincheck into the US, reports Bloomberg.

Getting over the crypto hack isn’t the only reason Coincheck is expanding into the US, though. The CEO of Monex, Oki ...

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