Wednesday, May 27, 2020

Japanese Watchdog FSA Pressuring Exchanges To Delist Privacy Coins

According to a report from Forbes, the Financial Services Agency (FSA) is applying a quiet pressure to the local exchanges to stop trading some privacy oriented altcoins that have been identified as favored by criminals. Cryptocurrencies like Monero, Zcash, and Dash, that are currently listed on most exchanges could be delisted in the future, at least from Japanese exchanges.

The problem with these coins is that due to the specific design of their blockchain is very difficult (or even impossible) to track the history of a transaction. What makes them ideal to be used in money laundering schemes and possibly in other criminal related activities. In fact, some exchanges have decided to delist these cryptocurrencies on their own after the Coincheck hack, that triggered a security overhaul spearheaded by the FSA.

The FSA has shown to be a powerful regulative force, even capable of kicking out a monster exchange like Binance from operating within Japanese borders. After the Coincheck hack, the FSA called all exchanges, licensed and unlicensed to pass on-site inspections. Those inspections were crowned with personalized recommendations of security that each exchange had to implement, or risk losing the license issued; all to regain the people’s trust in the cryptocurrency market.

Actually, all these privacy altcoins are still free to hold and trade in all exchanges in Japan, but due to the negative opinion that the FSA has about them, they could be banned from Japanese soil. Or maybe the self-regulating organization that groups all licensed agencies could voluntarily ban the trade, with the objective of protecting itself from possible lawsuits involving facts related to the trade of these coins.

In any case, Japan has always been a trendsetter in all cryptocurrency legal stuff. So, if the Japanese regulators take this action, expect this to massify and extend to other latitudes sooner than later.

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