The chief policy officer of cryptocurrency exchange Coinbase has praised Japan’s tightened regulatory stance on the cryptocurrency industry, saying that the exchange’s longer-than-expected waiting period to receive its operating license is a good thing.
Mike Lempres spoke with local financial news outlet Nikkei Asian Review where he supported Japan’s increased security measures on the industry, saying that “[It] is good for us”.
The increased regulations that he references include Japan’s Financial Services Authority (FSA) intensification of security requirements from cryptocurrency exchanges since January’s largest reported hack that hit Japanese platform Coincheck. USD 532 million in the NEM cryptocurrency was stolen in the incident.
New cryptocurrency exchanges are now required to go through a more enhanced clearing process before they can legally operate, with 160 apparently waiting to receive their licenses.
According to Lempres, talks with Japan’s leading financial watchdog are ”going well” and Coinbase is committed to its target of launching in Japan by 2019. The exchange has been actively looking to enter the Japanese market since June, giving the timeframe of one year for this to materialize.
Terms of the agreement are being decided
One key area of the licensing agreement still being negotiated is whether Coinbase will be required to operate internally in Japan. According to Lempres, if the FSA requires it, it will certainly be problematic for the exchange’s security measures as they currently operate from the US.
”It would be hard for us to duplicate what we do in the US today in Japan and other countries,” he explained, noting that Coinbase has dozens of security-focused employees working from its California headquarters.
While 99% of funds are stored offline, he says, 1% is held in a so-called ”hot wallet” online which is fully insured.
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