Coinbase says it isn’t worried by Japanese regulators working to strengthen the country’s cryptocurrency regulatory framework. The virtual currency exchange platform also believes that it would soon obtain approval from Japan’s Financial Services Authority (FSA).
Robust Cryptocurrency Laws are Good for Business
In a recent interview with the Nikkei Asia Review, Coinbase chief policy officer, Mike Lempres commented on the FSA’s efforts to sanitize the national cryptocurrency scene, saying:
The Japanese government is more focused on security. That is good for us.
According to Lempres, the company isn’t afraid of increased regulatory scrutiny and believes its business won’t be affected either way. Lempres also highlighted Coinbase’s commitment to the safety and security of depositor funds.
The company executive said that the platform held only a small portion of its funds on hot wallets that are vulnerable to cyber attacks. However, Coinbase ensures full insurance for such funds in the event of any theft.
Coinbase Confident of Obtaining Regulatory Approval
Lempres also expressed confidence that Coinbase would obtain FSA approval. According to him, the company is engaged in high-level talks with regulators to ensure approval for the platform in 2019.
While commenting on the platform’s chances for approval, Lempres noted that the issue of where funds will be domiciled was still a point of contention between the exchange and the FSA. According to Lempres, Coinbase’s custodial solutions in the US provide premium security for cryptocurrency funds. Moving that infrastructure to Japan while improving the FSA’s oversight ability might create security issues for Coinbase.
Coinbase announced its foray to Japan in June 2018, appointing Nao Kitazawa to head operations in the country. The platform is among one of the over 160 companies seeking regulatory green light from the FSA which hasn’t granted any such approvals since December 2017.
The FSA has since the start of 2018 adopted a more hands-on approach to its oversight of the country’s cryptocurrency exchange arena. In the aftermath of the Coincheck hack in January 2018, the regulatory watchdog demanded that platforms upgrade their security infrastructure.
Some platforms like Binance have moved away from the country after clashes with the FSA. However, many still consider Japan a cryptocurrency-friendly nation, and the government appears ready to create an enabling environment for the emerging technology without compromising investor security.
Do you think stricter regulations will help in the fight against incessant hacking of cryptocurrency exchange platforms in Japan? Let us know your thoughts in the comment section below.
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