Kraken, one of the largest cryptocurrency exchanges in operation, has just announced that it will be ceasing its operations in Japan for the time being.

The move is as a result of increased regulations and sky-high operational costs in the Japanese cryptocurrency market.

In a report Bloomberg published, Kraken stated:

“Suspending our services for Japan residents will allow us to better focus on our resources to improve in other geographical areas.” They reassured their numerous customers by adding: “This is a localised suspension of service that only affects residents of Japan and does not impact services for Japanese citizens or businesses domiciled outside of Japan”.

For a while now, Japan has been cited as the hub for crypto activity by the cryptocurrency community. A large number of Japanese organizations have been hopping on the cryptocurrency bandwagon. Internet companies have shown growing interest in dipping into the rising market. As an example, Yahoo Japan recently announced the acquisition of a cryptocurrency exchange.

Along with companies, it seems the general public has warmed up to the sector as well. R25 conducted a survey where it was reported that approximately 14% of Japanese males within the age bracket of 25 to 30 own cryptocurrency.

Even while the Japanese public’s acceptance of cryptocurrency is on the rise, increasing government regulations have cropped up after the $560 Million hack of Coincheck. Several calls have been made by investors and members of the public for increased scrutiny of the exchanges to prevent a future occurrence.

The Japanese Financial Services Agency made a move towards protecting the industry by requiring licenses for exchanges and a higher level of security. This led to a lot of closures as some exchanges couldn’t meet these demands.

Kraken, on the other hand, obtained the necessary authority to operate in Japan without a license but the American-based company was never a crowd’s favorite.

Over the course of its 3-year existence in Japan, Kraken was never able to reach the volume it required to justify its existence in Japan. As of April 17th, the BTC/JPY pair accounted for a measly 0.9% of the exchange’s total volume, minuscule when compared to the BTC/USD pair’s total volume.


A Philippine lawmaker is pressuring her colleagues to expedite a vote on legislation that would increase the severity of penalties for crimes that involve cryptocurrencies.

Leila M. de Lima, a senator from the Phillippines’ opposition party, on Monday urged her colleagues to make Senate Bill 1694 a top priority during the present legislative session.

SB 1694, first introduced by Lima in March, aims to up the penalty by a full degree for crimes that are perpetrated using cryptocurrencies, which she says increase the difficulty of investigating crimes and bringing maleficent individuals to justice.

In her remarks, she cited a recent Bitcoin fraud case which saw two scam artists swindle more than 900 million pesos (~$50 million) from more than 50 Philippine investors.

“I hope that this occurrence will push my esteemed colleagues in the Senate to take my proposed bill seriously and help pass it into law soon. Knowing that virtual currency resembles money, and that the possibilities in using it are endless, higher penalty for its use on illegal activities is necessary,” she said in a statement. “No matter how small or big a group, same punishment must be given. It should never be easy to escape after stealing the hard earned money of other people,” she said.

Lima also encouraged her colleagues to vote on SB 959, which would reduce the minimum number of people needed to be involved in a swindling operation before defendants could face life imprisonment or the death penalty. At present, a crime can only be classified as a “syndicated estafa” if at least five people are involved; SB 959 would reduce that number to two.

Meanwhile, the country’s Securities and Exchange Commission (SEC) has also been ramping up its cryptocurrency enforcement efforts. Earlier this week, the agency issued a formal warning to 14 cryptocurrency investment schemes — which the agency claims are unregistered securities offerings — advising them that they could face penalties including fines or imprisonment if they continue to operate in the country.

Featured Image from Pixabay

bitcoin exchange

Today, New York Attorney General Eric T. Schneiderman initiated the Virtual Markets Integrity Initiative, a reality discovering investigation into the arrangements and practices of platforms utilized by purchasers to exchange virtual or “crypto” monetary forms like bitcoin and ether. As a component of a more extensive push to secure cryptographic money speculators and purchasers, the Attorney General’s office sent letters to thirteen noteworthy virtual cash exchanging platforms asking for key data on their activities, inside controls and defends to ensure client resources.

The attorney general is asking for data on the platforms’ activities, inside controls, and safeguards to ensure client resources, as per an announcement from Schneiderman’s office. “As the letters explain, the initiative seeks to increase transparency and accountability as it relates to the platforms retail investors rely on to trade virtual currency, and better inform enforcement agencies, investors, and consumers,” Schneiderman said in a statement.


The Investor Protection Bureau of the Office of the Attorney General sent letters to the following virtual currency trading platforms:

The initiative, in which the attorney general’s office sent letters to 13 virtual cash exchanging stages, tries to expand straightforwardness and responsibility as it identifies with the online offices that retail speculators depend on to exchange virtual money and better educate requirement offices, financial specialists, and shoppers.

Virtual Markets Integrity Initiative Questionnaire

The letters sent to the platforms include the questionnaire. It comprised of following sections:

  • Ownership and Control
  • Basic Operation and Fees
  • Trading Policies and procedures
  • Outages and Other Suspensions Of Trading
  • Internal Controls
  • Privacy and Money Laundering
  • Protection against Risks To Customer Funds
  • Written Materials

“With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” said Attorney General Schneiderman. “Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”

hong kong

Hong Kong securities regulators are ramping up the rhetoric on initial coin offerings (ICOs).

Speaking last week at an investment industry event, Julia Leung, deputy chief executive officer of Hong Kong’s Securities and Futures Commission (SFC) warned that many ICOs violate securities laws.

“While we acknowledge that innovative technologies such as blockchain have the potential to improve efficiency and financial inclusion, that does not entitle anyone to conduct fundraising from the public in violation of securities law,” she said, adding that most ordinary investors are not equipped to evaluate these investments.

That in itself was not out of the ordinary. Most countries loop this nascent fundraising model under current their current securities frameworks and expect startups issuing security tokens to operate accordingly.

However, Leung then went a step further, stating that many ICOs are dubious while others are outright frauds.

“Further complicating matters, many of these fundraisings are dubious, if not downright frauds,” she said. “The issuers escape the scrutiny of the police or securities regulators because of their cross-border nature and the way the crypto assets are structured to fall outside any regulator’s perimeter.”

This is not the first time the SFC has sounded the warning bell on ICOs, and it has matched those words with action on several occasions.

Last month, the SFC shut down the ICO for cryptocurrency startup Black Cell Technology, alleging that it had engaged in “unlicensed regulatory activity” and was not registered with the government.

Previously, the SFC had sent letters to seven cryptocurrency exchanges warning them to delist tokens the agency considers to be securities.

Recently, three Hong Kong-based exchanges — Binance, OKEx, and Bitfinex — have announced plans to move their operations overseas, to Malta in the first two cases and Switzerland in the third.

While they did not explicitly cite Hong Kong’s regulatory environment as a reason for the move, all have lauded the cryptocurrency-friendly climates in their new locations. Switzerland’s canton of Zug has been nicknamed “Crypto Valley” for the large number of cryptocurrency startups and ICOs that have relocated there, while Malta is seeking to establish itself as Europe’s “Blockchain Island.”

Featured Image from Pixabay

In a consultation paper released last week, the Bermuda Monetary Authority (BMA) proposed a framework for developing responsive regulation for the country’s expanding FinTech and cryptocurrency industry.  The paper introduces draft legislation that will apply to businesses providing services within the domestic virtual currency industry, including virtual currency exchanges and wallet providers.

Worldwide, financial regulators have encountered difficulty extending existing securities and financial legislation to virtual currency and related projects.   Attempts to regulate in this area are often motivated by a desire to protect investors or to prevent illicit activities like money laundering.  However, many jurisdictions are also attempting to design regulations that also foster innovation and economic growth. 

In an information session hosted by Wayne Caines, the Bermudan Minister of National Security, and covered by the Royal Gazette, government officials cited an increasing demand for regulatory certainty around cryptocurrency businesses.   While some cryptocurrency businesses and projects focus on decentralization and self-regulatory solutions, other businesses increasingly seek to operate and grow within regulatory environments where their employees, contributors, and clients aren’t exposed to uncertain legal and financial risk.

The Regulatory Sandbox

Notably, Bermuda’s consultation paper proposes allowing innovative businesses in this sector to participate in a “regulatory sandbox” as part of their licensing system.  Regulatory sandboxes allow businesses to consult with regulators while developing innovative products, services, and business models.  The sandbox model also limits exposure to regulatory consequences while a business refines their offerings.  Participation also provides regulators with essential information and feedback for designing effective, responsive and appropriate regulation.   

If the proposals are implemented, Bermuda will join countries like Canada and the United Kingdom in adopting the regulatory sandbox approach to cryptocurrency business.  The 150-page consultation paper and related proposed legislation can be accessed via the BMA’s Notices page.   The paper and its proposals are open for comment from the industry and the public until May 2, 2018.