Even after experiencing high scale hacking for the cryptocurrency platforms, Japan is continuing to be optimistic that the industry will continue to grow. The outcome of these hackings is simply regulations that will make cryptocurrencies accountable for hackings. On top of that, the Japanese government is encouraging the inflow of talent such as software engineers into cryptocurrency exchanges to make their security infrastructure more solid.
In other news, the CEO of Mt. Gox wants to recoup all of the losses that occur during the hacking. As the cryptocurrency exchange had about 200,000 Bitcoins which was placed in a separate storage location, the possibility of refunding the customers is highly likely. Since then, Mt. Gox has been declared bankrupt.
An expensive lesson to learn
The Mt Gox exchange happened when Japan was on top of the world because it was the leading Bitcoin cryptocurrency exchange. Indeed, this hack has been a wake-up call for Japanese authorities and consumers, but it has not resulted in a strictly prohibitive regulation.
On top of that, another hacking occurred to the exchange Coincheck which saw about $547 million being taken away. Again, Japan remains optimistic in the face of adversity. Shortly after, the introduce regulations that will make it compulsory for exchanges to enable on-site inspection by regulators.
Japan remains optimistic
In Japan, Bitcoin is legally recognized as a form of payment. This was since April 2017 and major retailers already accepted as a form of payment. To other countries such as China and South Korea, Japanese authorities have implemented the regulations that enable the growth of the industry. So far, there have been no arrests done for the previous Coincheck hacking. It was concluded that the mistake happened because the cryptocurrency placed the exchange assets in a hot wallet.
This is a method of storing cryptocurrencies in which they are connected to the Internet. Therefore, it leaves room for hacking to happen. Under the new regulations large by the Japanese government, it is compulsory for these exchanges to store their assets in a separate location that is not connected to the Internet. On top of that, the method of storage must also have several security features that can help keep consumer assets safe. Thankfully, the Coincheck exchange has promised to complensate the losses to their customers.
Yahoo Japan joins in the industry
Another company which is getting into the cryptocurrency industry is Yahoo Japan. They recently announced that they would be buying a stake in an exchange in Tokyo. This is a huge deal because they are purchasing about a 40% stake. If it is finalized, this deal will be the latest major deal between a corporate entity and an exchange. Critics see this move as Yahoo dismissing the potential risks in the cryptocurrency space.
Through this partnership, Yahoo will bring in there is security and service operation expertise that will help solidify the security within the cryptocurrency exchange. As a result, the valuation of the cryptocurrency market has also increased probably due to the rumors that this partnership is going to happen. This is a groundbreaking move for Yahoo because they are entering into the blockchain space as they believe in the potential that virtual currencies can bring to their business. Also, this signals their support for the cryptocurrency exchange as they want to provide their resources to solidify the safety of exchange services within Japan.
Japan still warns its cryptocurrency traders
Despite all the activity going on in the cryptocurrency space, the Japanese government still wants to remind it cryptocurrency investors that there are imminent risks when trading cryptocurrencies. One of the risks involved losing the entire amount of money that you invest in the space. In fact, the central bank of Japan has recently come up with a question and answer session on their financial education website. However, the overall tone of the page with very negative about the prospects of cryptocurrencies.
In the page, it details about whether cryptocurrencies can be considered as a currency, the possibilities of people profiting off the and whether it is likely that with the cryptocurrencies will be stolen again. As it a centralized platform that is relieving information about cryptocurrencies, people reading the page need to read it with a lot of caution. Putting the needs of cryptocurrencies firstly not probably be on their agenda.
Wrapping it up
In the year 2018, it has been a largely bearish market for most cryptocurrencies. It has been reflected in the price movement of Bitcoin that is seemingly taking a cooldown from despite that it did in last December. Although so, Japanese cryptocurrency investors continue to be invested in the market as they watch the movement of Bitcoin. Cryptocurrency exchanges will undoubtedly continue to see high levels of transaction volumes within their systems.
However, one of the contributing factors to Japan’s enthusiasm already cryptocurrency space is the fact that the Japanese government is very supportive of the industry. For cryptocurrency enthusiasts, it is important that we give some time for the cryptocurrency market to mature. When the technology comes to a point where it is advanced enough, it is possible that we will see a creation that can change the way people live their lives.