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Japanese Crypto Exchanges’ Self Regulator Applies for Official Status

The recently formed Japan Virtual Currency Exchange Association has applied with the country’s financial regulator to become recognized as the official self-regulatory body representing cryptocurrency in Japan.

The JVCEA comprises of 16 licensed crypto exchanges, who are self-described as security inspectors of Japan’s cryptocurrency exchanges. The association has gone to great lengths to cover all aspects of how exchanges should function, drawing up nearly 1,000 pages of self-regulatory measures. The JVCEA was formed by Japanese crypto exchanges earlier this year in response to a $534 million heist on the Coincheck platform.

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. The JVCEA has said in a statement that it hopes to contribute to “the sound development of the virtual currency exchange industry and the protection of the interests of users.”

Its application for certification filed with Japanese Financial Regulator (FSA) will allow it to become what it calls a “certified fund settlement business association,” which will provide “guidance and recommendations to members to comply with regulations, laws and self-regulation rules.”

The JVCEA is not the only Japanese cryptocurrency association, as two others exist; the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA), and most crypto exchanges are members of one of these organizations.

The JVCEA has already proposed regulations in place which it would hope to make official should the application to become the country’s cryptocurrency representative body be accepted by the FSA. The new rules would affect the way exchanges operate, and according to local news sources, privacy coin listings and insider trading will come under the regulatory microscope.

As suggested before, the JVCEA will enforce their 4 times leverage trading cap limit rule and possibly enforce trading restrictions for both the very young and the elderly. It has been reported that the FSA would be entrusting the new body with “the flexibility to rapidly develop technologies and to combine technological innovation and customer protection.”

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1 in 4 Hong Kong Residents Would Invest in Crypto

A survey conducted by the Hong Kong Blockchain Association (HKBA) has revealed that 23% of Hong Kong residents would consider investing in cryptocurrencies, given a recession.

The response was based on the fact that many respondents anticipated a downturn in the world economy within the next year. Reportedly, a large portion of those surveyed would consider investing in cryptocurrency, despite their current concerns about digital currencies outweighing their potential advantages.

Regulation was an issue with almost 60% of respondents, many of them indicating that clear regulations and proper licensing laws were needed for cryptocurrency exchanges. Some suggested that examples such as Japan and Singapore were models worthy of Hong Kong regulators worth considering.

Of the 46% suggesting that hardship may be around the corner due to an economic downturn, some would consider investing in cryptocurrency. A quarter of all those surveyed suggested they would invest but only in times of economic hardship but currently have no need.

In other news from the country, the Hong Kong Monetary Authority (HKMA), the region’s currency board and central bank, is launching a live blockchain-based trading platform in September, backed by HSBC, Bank of China, ANZ, DBS Bank, Bank of East Asia, and the Hang Seng Bank. Howard Lee, HKMA’s deputy chief executive, has suggested that it will be the largest multi-bank blockchain project of its kind in Hong Kong.

The Forbes 30 under 30 Asia list was released earlier this year with many of the drivers in the financial world located in Asia. The list showcased a new generation of talent from venture capital to the latest disruptive digital technologies. Many of this year’s nominees had embraced cryptocurrency ventures.

Two on this year’s list are Ryan Zhou, 23, and Myunghun Cha, 28. Zhou founded Australian personal finance platform Coinjar, simplifying the trading of Bitcoin which now has a turnover of USD 758 million with 350,000 members.

South Korean Cha founded Coinone, now one of the country’s largest exchanges trading around USD 10 billion a month and earning over USD 70 billion in 2017.

 

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New Japan Internal Regulator Flexes Muscles, Limits Margin Trading Loans

The recently-formed Japan Virtual Currency Exchange Association (JVCEA) is proposing to set a limit on margin trading loans. Margin trading is the process of borrowing money from a broker to trade in cryptocurrency when the investor or trader has insufficient funds to do so.

It has been suggested that the new borrowing limit for trading platforms in Japan should be set at four times the customer deposit when margin trading. Currently, there are no limits on how much cryptocurrency investors can borrow when margin trading.

The Financial Services Agency (FSA) has released figures showing that in April, there were 142,000 crypto traders in Japan. That monthly figure represents a small percentage of the total of 3 million Japanese traders.

Out of 2017’s recorded USD 543 billion of crypto trading in Japan, margin traders accounted for more 90% of the derivatives trading total, which was over 80% of the entire cryptocurrency trading volume for that year.

The proposal which is now set to be presented to the FSA may rebound on the industry as there is some thought that by setting limits on investors, this may well lead to some investors moving away from using cryptocurrency exchanges, although the proposed changes would allow exchanges to set their own limits.

The JVCEA, which is proposing the new limit, comprises of 16 licensed crypto exchanges, who are self-described as security inspectors of Japan’s cryptocurrency exchanges. The association has gone to great lengths to cover all aspects of how exchanges should function, drawing up nearly 1,000 pages of self-regulatory measures. The JVCEA was formed by Japanese crypto exchanges earlier this year in response to a USD 534 million heist on the Coincheck platform.

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.

 

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World’s First Bank-Backed Crypto Exchange Opens For Trading

VCTRADE, the world’s first bank-backed cryptocurrency exchange, is now open for trading in Japan after its launch last month, reports Coindesk..

The exchange, owned by Japanese banking giant SBI Holdings, has now opened trading to users aged between 20 and 70 years, after only servicing limited pre-registered users, providing that they are resident in Japan. Corporate entities are still unable to use the exchange at this time.

At the original launch last month, SBI announced that the VCTRADE platform would facilitate the trading of the Japanese yen against Ripple’s XRP. The company’s Chairman and CEO Yoshitaka Kitao recently said that he saw Ripple as becoming a universal digital currency to compete with Bitcoin in the future, due to the digital currency’s payment platform for international money transfer and remittance services.

The delay in VCTRADE’s opening for business was due to the need to upgrade the platform following a USD 533 million hack against another Japanese exchange, Coincheck, earlier this year. These moves illustrate SBI’s continued investment across the region investing USD 460 million in its AI and blockchain fund. Kitao commented:

“There’s a lot of speculative demand around cryptocurrencies, which is why the price is going up so quickly, but people need to think about how these technologies are being used in real life and how they can improve people’s businesses.”

Earlier this year, it was revealed that SBI had planned to launch a new cryptocurrency exchange and was also investing in renewable energy wind farm cryptocurrency mining cryptocurrency and was working on improved 5G mobile connectivity and AI.

In other news from Japan, South Korean exchange giant, Bithumb, is hoping to get a licence to operate in the country, although with tougher cryptocurrency rules following the Coincheck and Monocoin attacks, it may have to jump through some hoops. Its own exchange suffered a hack of USD 31.5 million recently.

If Bithumb is successful, it would open a new office in February of 2019. The company is reportedly planning to extend its reach overseas launching new faster and efficient platforms for worldwide traders.

 

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NEM Strengthens Regional Foothold with Two New Blockchain Hubs in Australasia

Creators of the XEM digital currency NEM have announced that the company is to open two blockchain hubs in Australia and New Zealand.

The Australian hub will be located in Brisbane at Fortitude Valley and its New Zealand counterpart will be established in Westport. NEM Foundation’s director for Australia and NZ, Jason Lee, said that both hubs will be represented by a NEM staff member in place with a role to “educate and inform the general public and businesses about the benefits and applications of blockchain”.

The Australian hub is hosted by TravelByBit which promotes the use of cryptocurrencies in Australia’s tourism industry and has become a supporter of numerous businesses which accept Bitcoin and other digital currencies for food, services and travel around the country.

Caleb Yeoh of TravelByBit, who is also a board member of Blockchain Australia, welcomes the NEM connections and sees it as another positive move towards Australia’s wider cryptocurrency “education and adoption”.

The New Zealand hub in Westport, just a 45-minute flight from New Zealand’s capital Wellington, will also include a co-working space and will provide regular educational and engagement activities as well as a NEM incubation platform.

New Zealand’s Minister of State for Trade and Export Damien O’Connor is positive that such hubs demonstrate the country’s desire to be in the vanguard of promoting new technologies in the region. He stated:

“Blockchain development represents an exciting new frontier for startups in New Zealand and it’s great to see that going on in our regions with such strong international support.”

The XEM Foundation is now a feature of 47 countries around the world and the two regional hubs see themselves as key in being able to encourage local startups and to promote NEM’s Global Community Fund which currently has $ 300 million allocated to it annually.

Asian markets, primarily Japan and South Korea, will be encouraged by XEM’s new presence in Australia and New Zealand, giving the company a real foothold in Australasia.

 

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Japanese Police Seize Crypto For Parking Tickets, Setting Legal Precedent

Japanese police from Hyogo Prefecture have seized cryptocurrency, albeit a small amount, for unpaid traffic tickets for the first time in history. Apparently, a revised fund settlement act issued in April 2017 which legalizes cryptocurrency as a payment method gives police the ability to seize crypto for unpaid fines.

Typically real-estate, vehicles, bank savings, salary, and life insurance payouts can be seized by Japanese police for unpaid fines. However, the man, in this case, has no bank accounts and police don’t know where he works, so they went into his cryptocurrency exchange account and took the balance. Police seized JPY 5,000 (USD 44), which is actually a small fraction of the total of JPY 99,7000 in unpaid traffic tickets the man accrued for leaving his vehicle unattended and illegally parked. If payment for these fines is not received by the end of July 2018, the Japanese police will liquidate the seized cryptocurrency into fiat.

This is a miniscule amount of cryptocurrency, but it’s not the amount of cryptocurrency seized that matters, but the fact that Japanese police have now set a precedent for seizing cryptocurrency to pay fines. It goes further than that, now government officials across Japan have been given the precedent to seize cryptocurrency for any unpaid debt.

This is yet another reason to keep cryptocurrency in your own wallet instead of an exchange. It is important to keep cryptocurrency in wallets where you are in complete control of the private keys and no one else. If the man followed this simple rule, there would be no way for Japanese police to seize his crypto. The only reason this cryptocurrency was seized is because the man kept it on a centralized exchange where he did not control the private keys. Literally, someone could have USD 1 billion sitting in Bitcoin and an entire police department surrounding them in an interrogation room, but if the private key is properly secured then the police have no way to access the Bitcoin.

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Five Spanish Speaking Universities Offering Crypto-Courses Join Education Surge

Five universities across three Spanish-speaking countries, Spain, Argentina and Venezuela, are now offering crypto courses, reports one of the crypto-news outlets.

Asia is normally regarded as the world’s cryptocurrency hub with centers, courses, and crypto educational establishments on the rise, where Japan, Thailand and South Korea are leading the way.

However, Asia isn’t the only continent taking steps to educate its crypto communities. There are numerous courses now being run by private schools, companies, and universities across the globe. The new courses for Spanish speakers offer studies in Bitcoin, Ethereum, cryptocurrencies, blockchains, initial coin offerings (ICOs), smart contracts, DAOs, and crypto-economics.

In Europe, Spain’s capital Madrid offers a new venue for crypto studies. The Universidad de Alcalá is not only a world heritage site it is also one of Europe’s oldest universities dating back to 1293. The University of Alcalá is especially renowned in the Spanish-speaking world for its annual presentation of the highly prestigious Cervantes Prize, the most prestigious and remunerative award given for Spanish-language literature.

The university now offers a course entitled “Master in Ethereum, Blockchain Technology and Crypto-Economics,” and promotes the study as being for “professionals, students or those interested in learning about blockchain-based technologies from an integrative perspective of technical, economic, social and legal aspects.”

Not to be outdone, another Madrid university has opened its doors to cryptocurrency enthusiasts and professionals. Universidad Europea Madrid, the European University of Madrid, is a private university with more than 16,000 students. The school offers a 6-month postgraduate diploma in Bitcoin and blockchain which starts in October.

Across the world in South America, struggling Venezuela, along with Argentina have both recently started offering courses. In hyperinflation struck Venezuela, Bitcoin for some is the only way of putting food on the table due to the state of the country’s national currency — bolivar, which is now worth practically nothing.

The Instituto de Estudios Superiores de Administración (IESA) a private non-profit business school with 3 campuses, which offers a 60hr summer course called “Cryptocurrency, blockchain and business in the new economy, opportunities and challenges for management and business.”

In Buenos Aires, Argentina’s capital, the Instituto Tecnológico de Buenos Aires (ITBA), the Buenos Aires Institute of Technology, is a private university focusing on information technology, business and engineering studies offering a course of 3 months for newcomers to cryptocurrencies:

“It is designed especially for people who start from scratch or with very basic knowledge and who want to learn the reasons, mechanics and disruptive opportunities at a monetary, technological level and as a form of investment that is in the present and future in the world of crypto-economies.”

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Japan to Upgrade Crypto and Exchange Legislation

In a recent report, local Japanese media outlet Sankei has indicated that the Japanese Financial Services Agency (FSA) is to change the legal foundations on which cryptocurrency regulations are based in the country.

Classification switch

The report made on3  July states that the Japanese financial watchdog is considering to regulate cryptocurrency exchanges under the Financial Instruments and Exchange Act (FIEA), which is a switch from the Payment Services Act.

Under the new classification, exchanges would be required to manage private and institutional assets separately.

According to the report made by Sankei, the law (FIEA) “obliges securities companies and others to manage customer funds and securities (stocks, etc.) separately from corporate assets”. It also establishes “a strict investor protection system, such as forbidding insider trading of stocks”.

Customer protection

The cause for the move came after a scandal involving NEM coin in January 2018; at this time an equivalent to roughly JPY 58 billion (USD 530 million) was hacked from one of the largest cryptocurrency exchanges in Japan, Coincheck.

This led to the Japanese government and the FSA recognizing that customer asset protections were of utmost importance and, furthermore, the previous legislation that was enacted in April 2017 was insufficient.

The April 2017 legislation was huge news from Japan; it saw Bitcoin and other virtual currencies being officially accepted as legitimate means of payment. It also meant that cryptocurrency exchange operators with a domestic presence were mandated to register with the FSA and gain a license should they wish to resume business.

Now, just over a year later and after a difficult lesson, the inefficiencies of the previous legislation have been acknowledged and now a more robust set of investor protections are required.

Currently, cryptocurrencies are legally considered the same as electronic money; however, should the FSA move the regulatory basis to FEIA, cryptocurrencies will be treated as a financial product. This creates the possibility of trading cryptocurrency derivatives like futures and exchange-traded funds.

Moving forward

Bitcoin News has reported on multiple occasions that Japan is somewhat a speculative hotspot for the future of cryptocurrencies. This year has seen the pro-crypto nation wrestle with crypto-scepticism several times.

In June, Japan’s self-regulatory Virtual Currency Exchange Association (JVCEA), was to announce fresh laws regarding insider trading by banning private coins. However, cryptocurrency exchanges weren’t particularly pleased even going as far as to say that the rules were “as tough as the Financial Instruments and Exchange Act”.

Though in hindsight, this quote appears to overlook the NEM scandal. Furthermore, JVCEA has been offering suggestions to the FSA regarding mandatory storage protocols for crypto exchanges.

 

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SBI Ripple Asia Wants XRP as World’s Standard Digital Currency

SBI Group CEO Yoshitaka Kitao, who also leads SBI Ripple Asia, has stated that he sees the XRP token becoming a global standard for cryptocurrencies and fiat money, writes CryptoGlobe.

Kitao’s company, the Strategic Business Innovator Group, is a financial services company group based in Tokyo, Japan and is listed on the Tokyo Stock Exchange.

While speaking at the Japan Blockchain Conference recently, he praised blockchain technology, predicting that it would sustain its growth into the future but was less complimentary towards Bitcoin which he regarded as “too expensive”. He went on to suggest that the crypto giant had become simple a speculative asset which users hoped would increase in value.

Ripple, he maintained, was a “battle tested” product, efficient in processing cross-border transactions and capable of solving many of the existing problems related to international payment processing by using XRP.

Kitao sees distributed financial technology as transformational in terms of its place in the Asian financial infrastructure and cited Ripple’s cooperative programs currently in place with top banks in the Asia Pacific region.

SBI clearly has a bullish stance on XRP running an initiative called SBI Ripple Asia since 2016 which has the world’s third highest GDP of nearly USD 5 trillion. Its CEO calls for a utilitarian stance on cryptocurrency as he sees the opportunity to do so often is sacrificed to making purely making profits:

“We want to take blockchain beyond financial. There’s a lot of speculative demand around cryptocurrencies, which is why the price is going up so quickly, but people need to think about how these technologies are being used in real life and how they can improve people’’s businesses.”

Despite his vocal critique of Bitcoin at the conference, he lists the flagship digital currency on SBI’s newly-opened exchange, SBI Virtual Currencies, along with Bitcoin Cash (BCH) and XRP.

 

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Japanese Exchange Association to Ban Insider Trading and Anonymous Coins

Japan’s Virtual Currency Exchange Association (JVCEA) is set to announce new laws on insider trading next week, reports the Nikkei Asian Review.

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.

The JVCEA comprises of 16 licensed crypto exchanges, who are self-described as security inspectors of Japan’s cryptocurrency exchanges. It is proposing a ban, along with penalties for infringement, on cryptocurrency insider trading.

Also, the regulations may extend to “anonymity-oriented cryptocurrencies” on exchanges. These are currencies which can’t be traced to previous sellers as its felt that they could be used for money laundering purposes, such as Monero, Dash, and Zcash.

Other proposed regulations that are thought to become prioritized by the association relating to the protection of customer assets suggest a better management process for customers keeping private keys offline to prevent hacking opportunities. The publication further measure aimed at protecting customers:

“…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.”

It is thought these new measures concerning private coins will be introduced due to earlier reports that if a major exchange were to handle a new currency this would cause a market surge, followed by the suspicion that the market had been manipulated. The new rules by banning the private coins will eliminate this risk, according to JVCEA.

According to the Nikkei Asian review, the association has gone to great lengths to cover all aspects of how exchanges should function, drawing up nearly 1,000 pages of self-regulatory measures.

The new requirement hasn’t gone down well with all exchanges, however. One exchange spokesman commented, “We’re being subjected to rules almost as tough as the Financial Instruments and Exchange Act.” – the rules which govern securities companies in Japan.

 

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