On April 30, 2018, Forbes reported Japan’s Financial Services Authority (FSA), is putting pressure on cryptocurrency exchanges from trading privacy altcoins such as Dash (DASH), Zcash (ZEC), and Monero (XMR).
Claims by the FSA state privacy-focused cryptocurrencies are difficult and sometimes impossible to track which is increasing their popularity with criminals and hackers. Unlike coins such as Bitcoin, privacy-focused cryptocurrencies prevent you from tracing transactions or exploring the blockchain.
“It should be seriously discussed as to whether any registered cryptocurrency exchange should be allowed to use such currencies.” said an FSA member, according to Forbes.
In January, Tokyo-based Coincheck experienced a hack which resulted in the theft of 58 billion Yen ($530 million USD) of cryptocurrency from the exchange.
The hacking of Coincheck is considered one of the world’s biggest cyberheists.
In March, Coincheck stopped all trading of Monero, and two other “hard to track” cryptocurrencies. According to Forbes Coincheck has not yet responded to questions as to why they dropped the three cryptocurrencies.
In the aftermath of the hack, the FSA became strict with their laws which put many exchanges under a microscope. Some exchanges needed to shut down due to their inability to comply with new requirements.
The Japanese Cryptocurrency Exchange Association (JCEA) has announced they will be forming a self-regulating body. Chairman Taizen Okuyama, CEO of forex firm Money Partners, says it will give assistance to exchanges that cannot comply with the FSA.
“I would like to create a situation where I can give advice to (unlicensed exchanges), the development of the industry as a whole is important,” said Okuyama
Currently, there is no official ban which prohibits holding or trading privacy coins in Japan and many investors remain optimistic about the future.