Japan’s top regulator wants to see crypto market grow

Toshihide Endo, commissioner of Japan’s Financial Services Agency (FSA) has said he would like to see the cryptocurrency market grow, under the appropriate regulatory supervision.

Coincheck $530m hack brought greater regulatory scrutiny on Japan’s crypto exchanges

In an interview with Reuters on Wednesday, the commissioner said it would continue to monitor closely the activities of cryptocurrency exchanges, but that the FSA wanted to strike a balance between protecting consumers and promoting technological innovation.

Deeper regulatory scrutiny

The country was one of the first to engage in regulation of cryptocurrency exchanges, and deepened its scrutiny of the exchange sector following the hacking of Japan’s Coincheck exchange in January, when $530m in digital currencies was stolen.

Regulators conducted an investigation into Japan’s exchanges following the Coincheck hack. It found poor compliance with anti-money laundering standards, badly trained staff and misappropriated digital tokens.

Improving controls

The investigation resulted in two exchanges – Bitstation and FSHO – being ordered to suspend trading for a month while they cleaned up their acts. Coincheck was told to improve internal controls and report back to the regulator.

But Endo said the regulator wanted the innovatory sector to continue doing business.

He said: “We have no intention to curb the industry excessively. We would like to see it grow under appropriate regulation.”