Recent data from Japan’s Financial Services Authority show a huge interest in cryptocurrency, with 3.5 million crypto traders active in the country.
The survey, taken from 17 Japanese cryptocurrency exchanges, shows that the most traded cryptocurrencies in Japan are BTC, ETH, XRP, BCH, and LTC. Most crypto traders are aged from 20 to 40 years old, with the 34% of the group in their 30s. Annual trading in Bitcoin alone has risen from $22 million in 2014 to $97 billion in 2017, with the trading of Bitcoin as an underlying asset like futures even higher, increasing from $2 million to $543 billion over the same time period.
The booming trading industry is perhaps the reason that Japan are taking such a hands-on approach to ICO regulation.Where China and South Korea chose to ban ICOs entirely pending further investigation into the issue, Japan announced earlier this month that that a government-backed research group is working on regulatory guidelines that will grant regulatory approval to ICOs whose application is successful.
The guidelines include identification of investors to prevent money laundering, a major concern for many government authorities surrounding ICOs. The guidelines will also cover increased cybersecurity measures to prevent fraud and and insider trading. Legalizing ICOs in Japan could set a useful precedent for other countries to follow, and all eyes are on Japan to see exactly how the regulatory measures will work.
The announcement to regulate the cryptocurrency space follows the largest ever heist in cryptocurrency to date which took place earlier this year when Japanese exchange Coincheck was hacked and $550 million worth of NEM tokens stolen, the majority of which have reportedly already been laundered. Coincheck has since been sold for $34 million to Monex following the breach, which Coincheck attributed to the exchange scaling beyond staff capacity.
With huge amounts of money changing hands, the ICO space is vulnerable to fraud and exploitation – chat service Telegram have raised over $1.7 billion in the largest ever ICO, and discovered a company legally registered by scammers under the name of the new Telegram venture in an effort to divert funds.
In a space that many agree is in need of some kind of regulation, Japan’s efforts may well be the answer to legally incorporating ICO fundraising to fintech, blockchain, and traditional finance markets in a way that protects investors and continues to allow the cryptocurrency space to develop.
Japan is now officially the world’s largest Bitcoin trading market, and the government certainly seem to be meeting the issue head on by exploring a way of sustaining that growth in a more controlled environment.
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Source : CryptoCoinNews