The financial watchdog in Japan is stretching its authority on cryptocurrency exchanges in the country in a bid to form a heavily regulated crypto market. This hunger for control is slowly leading the regulator to even scrutinize the virtual coins being traded at the exchanges. Due to the scrutiny, Monero, Zcash, and Dash may soon disappear from Japanese cryptocurrency exchanges.
Reason? The Financial Services Agency, Japan’s financial regulator, is considering the difficulty of tracing transactions of these privacy coins compared to other coins like Bitcoin which are relatively easy to trace.
Therefore, as implied by the FSA, the private coins are a target of criminals who ride on the anonymity to fund illegal activities.
To show their commitment to fulfilling all the FSA requirements, Coincheck had to denounce trading Monero, Zcash, and Dash when resuming business after the massive hack in January. Although not publicly expressed by the Financial Services Agency, the pressure is being mounted on cryptocurrency exchanges in Japan to stop dealing with the privacy altcoins.
Cryptocurrency exchanges seeking approval from the financial regulator, are supposed to not trade in Monero, Zcash, and Dash for them to have a better chance of being awarded a trading license.
“It should be seriously discussed as to whether any registered cryptocurrency exchange should be allowed to use such currencies” noted an FSA-mandated working group at a meeting early this month.
With the FSA tightening its grip on the cryptocurrency space in Japan, privacy altcoins such as Monero, Zcash, and Dash may soon disappear from Japanese cryptocurrency exchanges. After cryptocurrency exchanges formed a self-regulatory body, regulations from the FSA may be easier to implement.
As pressure mounts and privacy altcoins disappear from Japanese crypto exchanges, do you think the FSA will have completely shut down crypto related illegal activities?