Coinbase safeguards readies it for tougher Japanese scrutiny
Coinbase has highlighted its security safeguards in an interview published on Wednesday expressing its confidence in securing regulatory approval in Japan despite a tougher regulatory environment.
Mike Lempres, chief policy officer at Coinbase, told the Nikkei Asian Review that talks with Japan’s Financial Services Authority regarding the cryptocurrency exchange’s bid for a licence was “going well”.
Japan has stepped up its regulatory oversight of cryptocurrencies since recent hacking incidents in the country this year. Japan is said to have the highest proportion of cryptocurrency trading globally.
In the article, Lempres said that the increased security by Japanese authorities was good for the company. He said Coinbase had “dozens” of its 550 employees dedicated to security and that “99% of funds are stored offline, with only 1% held in “hot wallets” – accounts that are connected to the internet for convenience but can be vulnerable to hacking. That 1% is fully insured.”
Some of Coinbase’s confidence could also be a result of its current programme of engagement in Japan. This past June, Dan Romero, vice president and GM of Coinbase Consumer noted in a company blog announcing the launch of a new office in Japan that it planned “to take a deliberate approach to our rollout in Japan, which means working hand-in-hand with the Japanese FSA to ensure compliance with local laws at every stage.”
The company has yet to announce detailed plans but says it will rollout its services to Japanese customers with Japanese language translations for ease of use.
Referring to the theft of $530m from Japan-based Coincheck in January this year and $60m of digital coins stolen from Zaif more recently, Lempres remain undeterred and was quoted:
“Japan has been an active large market from the very beginning, and has proved resilient as it bounces back from several bad experiences,” Lempres said. “We think there is great demand for a trusted provider of services here.”