Japan’s FSA Regulator to Monitor Bitcoin Exchanges from October

Japan’s Financial Services Agency (FSA) is to begin monitoring Japanese bitcoin exchanges from October.

According to the Japan Times, the move is to ensure that digital currency exchanges have the correct internal systems, such as protecting customer assets, in place. If not, on-site inspections will be carried out.

In April, a revised payment services law went into affect. This set out operational standards for digital currency exchanges in addition to recognising bitcoin as a legal form of payment. As a result, there has been strong trading from Japan, which helped push bitcoin’s price up to $5,000 at the beginning of September.

According to an FSA executive, the move is to ensure the development of the market and to regulate bitcoin exchanges.

“We pursue both market fostering and regulation enforcement. We aim for sound market development.”

By the end of September, all cryptocurrency exchanges operating in Japan are required to register with authorities. The revised law includes anti-money laundering (AML) and know-your-customer (KYC) regulations.

To monitor the more than 20 bitcoin exchanges in Japan, the FSA has established a team of 30 members with the relevant expertise. The team will determine whether the exchanges have the appropriate risk management measures in place, including how to respond to cyberattacks.

Japan is no stranger to incidents involving the lose of customer assets in the digital market. The now-defunct bitcoin exchange Mt Gox is well known for its notorious past. In 2014, the exchange collapsed, which saw the loss of millions of dollars in customers’ funds. The exchange’s failure is considered a vital component in pushing Japanese authorities to regulating the market.

China Cracks Down on Domestic Bitcoin Exchanges

This move comes at a time when Chinese authorities have outlawed initial coin offerings (ICOs).

According to authorities, ICOs are an illegal form of fund-raising that is open to:

“…financial fraud, pyramid schemes and other criminal activities.”

After this announcement came the call to stop prominent domestic digital currency exchanges from operating in the country. Naturally, news of this saw market prices plummet. So much so, that on the 15th September, bitcoin’s price was trading at $2,947. As a result, its market cap was pushed down to $48.8 billion.

Following China’s move to halt bitcoin exchanges, several have already revealed when they will be closing. Chinese exchange BTCC is expected to stop functioning at the end of September. However, ViaBTC, will cease operations today, as of the 25th September. OKCoin and Huobi will halt their operations at the end of October. They have been given extensions due to the large number of users on their platforms and because neither listed ICO trading pairs.

Reportedly, ViaBTC will relaunch its platform overseas; however, it’s not know when the relaunch will take place.

Last week, at a global blockchain event held in Hong Kong, Haipo Yang, CEO of ViaBTC, said:

“A third of our customers come from outside China, and I believe these overseas users will continue to use the ViaBTC platform, so we can still provide value.”

Bitcoin’s Price Recovers Slightly

Since achieving the $5,000 mark at the beginning of September, bitcoin’s price has been on a roller coaster ride. This has been greatly brought about by China’s move to crackdown on the market.

However, today, the digital currency is showing some signs of improvement. At the time of publishing, bitcoin’s price is trading at $3,897, a 4.81 percent rise in 24 hours. In seven days, though, its value has dropped by 1.23 percent. Its market cap is currently worth $64.6 billion. Yet, it still has a way to go before it can attain its $75 billion market cap it achieved at the beginning of September.

At present, the combined market value is worth $135.4 billion. This, too, is a significant drop from its near $180 billion market value from the start of the month.

Only time will tell whether bitcoin’s price can once again reach new heights. Despite this slight setback in price many people remain confident that it will rise again, even further than what has already been seen.

To the Moon for Bitcoin?

Tom Lee, a Wall Street strategist and co-founder at Fundstrat, an independent research boutique, providing market strategy and sector research, believes bitcoin will rise to $25,000 in five years. Additionally, he states that it will remain the best asset to invest in to the end of 2017.

In a report, Lee said:

“I unequivocally believe bitcoin is your best investment to the end of the year.”

These are similar comments he made in August when he said:

“It has a lot of characteristics that are very similar to gold that I think will make it ultimately attractive as an alternate currency. It’s a good store of value.”

According to Lee, there’s no point in projecting bitcoin’s price two months from now. Instead, looking at its long-term future is the way forward.

Veteran trader masterluc has predicted a bullish price of $15,000 for bitcoin by the end of 2017. According to the trader, bitcoin will continue its bull run into 2019. At which point, the trader believes it will be worth between $40,000 and $110,000.

Bitcoin is ‘a Fraud’

Despite the confidence in the currency, not everyone thinks the same.

According to Jamie Dimon, JPMorgan Chase CEO, he thinks the cryptocurrency is ‘a fraud‘ and that it ‘won’t end well.’

At a conference in New York, the banker said:

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed. Currencies have legal support. It will blow up.”

Additionally, he stated that he would ‘fire in a second’ any employee found trading in the digital currency.

More recently, he took another shot at bitcoin claiming that it is a ‘novelty‘ and that it’s ‘worth nothing.’

In an interview, Dimon stated:

“Right now these crypto things are kind of a novelty. People think they’re kind of neat. But the bigger they get, the more governments are going to close them down.”

He added that ‘creating money out of thin air without government backing is very different from money with government backing.’

As such, this sort of creation, to him, is ‘worth nothing.’

One report suggests, though, that the CEOs of major U.S. banks are ‘probably afraid‘ of bitcoin and the blockchain.

Rainer Michael Preiss, executive director at Singapore-based Taurus Wealth Advisors, thinks this is because cryptocurrencies are becoming a viable investment alternative for people.

Featured image from Shutterstock.

Egyptian Central Bank Deputy Governor Rejects Bitcoin Adoption Rumour

The deputy governor of Egypt’s central bank has rejected claims that bitcoin adoption will take place at the country’s banks.

In a statement posted on Arabian news site Amwal Al Ghad, Lobna Helal, the Central Bank of Egypt’s (CBE) deputy governor, denied reports that the bank was permitting banks to handle bitcoin adoption.

In a statement, she said:

“For stability of the Egyptian banking system, the banks deal with the official currencies only, and never deal with any virtual currencies.”

Similar comments also came from Gamal Negm, another deputy governor and director of the CBE, who flatly refused the rumour that the CBE was going to accept bitcoin.

According to a report, the rumours circulating the central bank’s bitcoin adoption stemmed from social media around the 16th and 17th June. However, any such possibility was quickly denied by officials at the bank.

These comments come at a time when several jurisdictions around the world are contemplating how to classify the digital currency and whether it should be regulated.

Bitcoin Adoption

Japan is quite possibly becoming widely considered a forward-thinking country when it comes to the adoption of bitcoin.

In April, the country changed its payment regulations, which now sees the digital currency as a legal form of payment for goods and services. As a result of this attitude change to bitcoin it’s believed that by the end of 2017 there will be around 300,000 stores accepting it as a form of payment.

Considering the negative experience the country has had with bitcoin in the past, with the now-defunct digital currency exchange Mt Gox, the country’s interest in the market has been reawakened. As a result, this new influx of Japanese traders has helped to push the price of the currency up in the past. In June, the price of bitcoin soared past the $3,000 for the first time.

Low cost Japanese airline Peach Aviation Ltd., is just one such company that is due to start adopting bitcoin by the end of the year. It is hoped that the rapid appreciation that the digital currency has been experiencing lately in Japan will attract tourists to the country.

Russia too is another country that should be given due credit to its position with bitcoin adoption. In the past the Russian government has been against the acceptance of the digital currency.

So much so that last March, management and executives of banks and financial services firms who were found to be using bitcoin faced a seven-year prison sentence. Whereas everyday individuals caught trading it faced a sentence of at least four years. Now, though, the country has eased its stance on digital currencies such as bitcoin and while it is exploring the possibility of regulating it, it’s not sure whether to class it as a currency or an asset.

At the beginning of February, the Philippines released new guidelines for bitcoin exchanges operating in the country. The move by the Bangko Sentral ng Pilipinas (BSP) essentially signals the recognition and legalisation of bitcoin activity within the country.

Also noteworthy is India, which is one country that is currently debating how bitcoin should be regulated. While the digital currency is unlikely to be banned in the country, the question as to who will oversee its regulation remains unanswered. However, given the fact that the adoption of bitcoin is widely used among a large percentage of 18-35-year-olds, it remains to be seen what impact regulation will have on the population who remain supportive of it. If, and when, it becomes regulated it could help propel the currency to a population of 1.3 billion people that is home to the fastest growing smartphone market in the world.

Bitcoin’s Value Slumps

The first half of 2017 has seen a rapid appreciation of bitcoin. At the beginning of the year its value was trading at $1,000, but by the beginning of June it has soared to over $3,000.

With an increase in the number of traders investing in the digital currency around the world claims were circulating that it couldn’t sustain its pace, was in a bubble and was likely to burst with rapid downfalls.

Seven months into 2017 and the price of bitcoin is trading at $2,311 on the 18th July, according to CoinDesk’s Bitcoin Price Index (BPI). Many would say that the price of the currency has certainly burst. Not only that, but it was recently trading below $2,000 for the first time in a 49-day low on the 15th July. As a result, the market cap value of all digital currencies dropped to nearly $70 billion. The highest it has achieved is $115 billion, which it achieved in June.

However, while bitcoin’s value had dropped significantly from its June record, digital currencies across the board have also slumped. As a result, many are claiming that what the community is witnessing is not a bubble, but the result of a looming deadline which could solve bitcoin’s scaling issues.

Meanwhile Andreas Antonopoulos, author of ‘Mastering Bitcoin,’ said recently on social media, that the decline in the price of the digital currency market was due to a price correction given the fact that it has seen a 1500 percent rise in two years, particularly in the last three months.

The Community Watches and Waits

With the 1st August deadline looming, all the bitcoin network can do is wait and see what impact the upcoming activation of SegWit2x will produce on it.

It is hoped that this solution will answer the needs of the community who have often faced a backlog of transactions as they wait to join the blockchain.

Even though miners were expected to start signalling for the proposed solution until later in July, some miners have already signalled their support for it in an advanced move. According to a report from CoinDesk, around 43 percent of bitcoin’s mining power has signalled for the change. These include the likes of Antpool, BTC.com, BitClub and BitFury.

While it may be a surprise it is likely due to the need to upgrade the network protocol before the 1st August deadline.

Featured image from Flickr via Dennis Jarvis.

Mt Gox CEO Mark Karpelès Prepares for Bitcoin Trial in Japan

The former CEO of the now-defunct bitcoin exchange Mt Gox is preparing to head to trial in Japan next week where he faces embezzlement charges relating to the disappearance of around 650,000 bitcoins.

French-born Karpelès, who was released on bail last year from a Tokyo detention house on the condition that he didn’t leave Japan, is expected to plead innocent, according to his lawyer. In a report from the Japan Times, his lawyer Kiichi Iino said ‘he is keeping calm as the trial gets underway.’

It was back in August 2015 that Karpelès was first arrested with allegations that he had manipulated bitcoin volumes at Mt Gox. The following month he was charged with the embezzlement over the loss of hundreds of millions of dollars worth in bitcoin. It was reported, at the time, that Karpelès had stolen 321 million yen in the digital currency.

The Background to the Failure of Mt Gox

Launched in 2010, Mt Gox quickly became a popular bitcoin exchange for the countless enthusiasts of the digital currency seeking a place to buy and sell the currency. However, throughout its existence it was blighted by troubles, suffering a hack as early as the summer of 2011 and a lawsuit filed against Mt Gox alleging a breach of contract.

Despite this, though, by 2013 and into 2014 it was claimed that the exchange was handling around 80 percent of all global bitcoin trading as it became the world’s leading bitcoin exchange.

However, it wasn’t until November 2013, when bitcoin trading reached a new high of $1,300, that the exchange’s troubles took on a new level, bringing the community and the digital currency’s price crashing down.

At the beginning of February 2014, Mt Gox halted all bitcoin withdrawals, stating that it would continue indefinitely after detecting ‘unusual activity.’ On the 10th of February, the team at Mt Gox released a company statement, saying the issue was because of a transaction malleability.

“A bug in the bitcoin software makes it possible for someone to use the bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent.”

Yet, by the 20th of February, bitcoin withdrawal services had still not resumed. By the 23rd, Karpelès had resigned from the board of the Bitcoin Foundation and on the 24th Mt Gox suspended all trading and went offline.

By the end of February, Mt Gox had filed for bankruptcy protection in Tokyo and later in March for bankruptcy protection in the U.S. leaving a trail of angry investors demanding answers. With the company admitting that it had lost 750,000 of its customers’ bitcoins in addition to 100,000 of its own, Karpelès appeared on television to apologise and say that all the coins are ‘almost all gone.’ Subsequently, this news dented the reputation of the currency.

At the time, the loss of the 850,000 bitcoins was worth around $500 million, representing about seven percent of the estimated global total number of bitcoins.

Fast-forward a month later and the bitcoin exchange posted on its website that it had found 200,000 bitcoins worth around $116 million in an old wallet that had been used in 2011.

However, three years later and the mystery over the remaining missing bitcoins has continued to cause many to speculate where they could be.

According to the Japan Times, Karpelès led a rich life and is reported to have lived in an $11,000-a-month penthouse spending money lavishly, including on prostitutes.

What Now?

As things stand a court-appointed Toyko trustee in the Mt Gox investigation has completed a review of 24,750 individual claims by creditors as the reimbursement of lost funds to creditors takes shape.

Kolin Burges, a British investor who said he lost several hundred bitcoins in the exchange’s collapse, and is famous for protesting outside Mt Gox’s headquarters (main image), said:

“I’ve not had any back yet, but hopefully, eventually all the creditors will get a small percentage of their money back from the bankruptcy distribution.”

He added:

“The charges only cover a subset of the issues which were happening at Mt Gox, so I don’t expect that we will find out most of the information we want to know.”

If Karpelès is found guilty, he could face up to five years in prison and a fine of 500,000 yen or $4,000.

In light of the Mt Gox collapse, Japan passed a bill stating that all digital currency exchanges were required to be regulated by the Financial Services Agency.

Japan’s Interest in Bitcoin Grows

It may have been three years ago when the Mt Gox scandal broke, but in Japan wounds run deep.

So much so, that the country has shied away from digital currencies and what they stand for until recently. After Japanese regulations changed in April, which now sees bitcoin as a legal form of payment, thousands of merchants have stated that they will accept the digital currency by the end of 2017.

This reawakened interest in the digital currency has helped to push its value up as a new wave of investor interest turn their attention to bitcoin.

Of course, even though the most popular cryptocurrency has had a troubled past it still remains a viable alternative for many people around the world. As a result of this new influx of investors, the price of bitcoin soared to its highest yet in June where it was recorded at over $3,000. It has since settled back down to $2,450, according to CoinDesk’s Bitcoin Price Index (BPI), but considering it was struggling to break the $1,000 barrier at the end of 2016 it has come a long and significant way.

It remains to be seen how much further the currency can go and even though it will still be a currency that is used by criminals it’s hoped that bitcoin has reached a new level of maturity that its price won’t be too affected if such a negative situation involving bitcoin arises in the future.

Featured image from Flickr via Trân Trân.

Is the PBoC’s Regulation Crackdown Cooling Bitcoin Fever in China?

A surge of interest in bitcoin has seen its price reach new heights, yet the excitement of the digital currency market in China has been watered down due to the nations government who wants to control bitcoin.

According to a salesperson at Huobi, one of the ‘Big Three’ digital currency exchanges in China, the platform is receiving fewer phone calls for inquiries.

“This is because withdrawals are controlled by regulations.”

Sending money out of the country through bitcoin was easy for people to undertake. However, such a procedure for the People’s Bank of China (PBoC) was frustrating as its keen to keep the yuan from weakening.

As a result, in January 2017, the PBoC undertook on-sight inspections at China’s biggest digital currency exchanges known as the ‘Big Three’ in Shanghai and Beijing: OKCoin, BTCC and Huobi.

At the time, the Shanghai branch of the PBoC, said in a public statement that:

“The People’s Bank of China Shanghai HQ, the Shanghai Municipal Finance Office and other units formed a joint inspection team to carry out site inspections on Bitcoin China, focusing on checking whether it was operating beyond its business scope, whether it was engaging in unlicensed forex, payment, financing and other related businesses; whether it engaged in market manipulation; implementing anti-money laundering, financial security risks and so on.”

A separate notice was issued by the Beijing branch of the PBoC, which issued a similar statement.

BTCC revealed on social platform Weibo that it had met up with the PBoC and that it was ‘cooperating with regulatory departments.’

Bitcoin

In order to comply with the anti-money laundering (AML) and other requirements, all three exchanges announced that they would be suspending their withdrawal services and would only resume once they had received regulatory approval.

It was initially believed that the withdrawal freeze would only last one month; however, it continued through to March and only ended at the beginning on June, signalling the end of China’s freeze. News of digital currency exchanges resuming their services helped to bump the price of bitcoin back up to around $2,400.

However, while bitcoin trading volumes are gradually improving in China since the withdrawal restrictions, the PBoC still has a keen interest in digital currencies. So much so, that it’s expected to release a new set of regulations regarding them in due course. As a result, the Chinese bitcoin market remains on edge with no idea as to how these new rules will impact the currency.

Trading Turns to Japan

Unlike China, though, Japan has changed its stance of digital currencies such as bitcoin and now regards it as a legal form of payment for goods and services.

On 1 April, the Japanese government passed a law that had been drafted in December 2016, bringing bitcoin exchanges under AML and know-your-customer (KYC) rules, while listing bitcoin as a payment method.

The debate circulating the regulation of digital currencies such as bitcoin come in the wake of the collapse of Mt. Gox, the now-defunct digital currency exchange. In 2014, the digital market was left shattered after it was alleged that the Tokyo-based platform had lost $350 million or 744,4000 bitcoins. Mark Karpeles, CEO of Mt. Gox, was later arrested on allegations that he had manipulated volume on the-then leading bitcoin exchange prior to its demise. He is currently under investigation as to his involvement in the platform’s collapse and the remaining missing money.

Now that the law has been put into effect, it means that capital requirements are in place for the digital currency exchanges to protect users from any further mishaps. Not only that, but the exchanges are also required to undertake employee training programs and to submit yearly audits.

Such a turnaround of events has seen trading volumes in Japan rise. In May, trading of bitcoin in Japanese yen rose by 31 percent.

Furthermore, this acceptance of bitcoin has meant that retailers are working toward accepting it as a form of payment for customers.

Appearing to lead the way is Japanese low-cost airline Peach Aviation Ltd., who have announced that they will be accepting bitcoin as a form of payment by the end of the year to customers who want to purchase flight tickets. Japan’s leading online travel agent Evolable Asia has also teamed up with BITPoint Japan, the company behind Peach Aviation Ltd., to get 1,400 hotels and inns around the country to start accepting bitcoin by the summer of 2017.

Such a move is likely to produce a chain reaction, which is already being reported. So much so, that by the end of the year, it’s believed that there will be around 300,000 Japanese retailers accepting bitcoin for goods and services.

For a country that hasn’t had the best experience with bitcoin in the past, this news highlights how far the currency has come and the belief that countless individuals appear to have in it.

Many, however, continue to question bitcoin’s usage to pay for things considering it remains such a volatile asset and the transaction fees involved to transfer bitcoins. Despite this, though, the digital currency market remains popular with bitcoin leading the way. As such people appear embracive of the currency, which can be seen in Japan.

China to Follow?

It remains to be seen whether China will change its position on digital currencies and provide favourable regulations that will boost bitcoins price and restart the surge of interest within the country.

At the moment, the market is on tenterhooks as it remains unclear as to what direction the PBoC will take.

Yet, if China’s position on bitcoin regulations proves favourable, could it help to push the market cap of all digital currencies to one trillion dollars?

Bruce Fenton, a blockchain economic advisor, recently made this announcement on social media. According to him, in three years the market cap value of the entire crypto market will be valued at one trillion dollars.

Bitcoin

According to Coin Market Cap, it’s currently worth over $112 billion and is likely to continue rising as more interest and investment gets pushed into the market. It remains to be seen whether the one trillion mark is reached within three years or sooner than that.

Featured image from Flickr via worldwide finance.

Customers Can Now File Claims For Lost Bitcoins Against Mt. Gox

The Bitcoin and its industries is currently growing like ever before. We see more and more gambling sites opening up their doors to accepting the cryptocurrency, we see more and more mainstream adaption and we see more vendors, charities and online businesses accepting it.

But we don’t have to go more than a little over a year back in time to find the by far biggest bump in the road for the Bitcoin, when the biggest Bitcoin exchange site at the time, Mt. Gox, went bankrupt after months of problems.

Mt. Gox closed its doors officially in February of 2014, but at the time of the closure the customers had not been able to withdraw their funds or Bitcoins for months. Mark Karpeles, the owner of Mt. Gox, denied any issues almost until the end, but there was no way around a bankruptcy for Mt. Gox.

A total of 850,000 Bitcoins were missing for the company, totaling at a value at the time of almost $64 million. The case is the biggest to date in the Bitcoin industry and it should never be replaced, with new security measures in place, better control as well as regulations from many countries.

This doesn’t help the customers who lost their funds very much however. Many lost life-changing money when Mt. Gox closed down and people were so frustrated that they actually travelled to Mt. Gox’s headquarters in Tokyo, Japan, to try and figure out exactly what had happened.

Mt. Gox has since its closure been subject to several investigations and probes, to try and find out where the Bitcoins went exactly. It was first believed that Mt. Gox was hacked during 2013, where most of the Bitcoins were stolen from the exchange site, but that doesn’t seem to be the case anymore.

CoinDesk.com reported earlier this week that the Bitcoins had been going out of the system from 2011 until May 2013, where the company had almost no Bitcoins left and were effectively bankrupt at that point. The Bitcoins had been withdrawn from the company and sold on other exchange sites, leaving the company to operate at fractional reserve basis. 

There is some good news for those who lost their Bitcoins in the Mt. Gox failure, as the site has now opened up for customers to make a claim against the company. To do so is quite simply, as you simply need to visit claims.mtgox.com and fill in your account details by May 29th this year.

Once done you simply submit the claim on the website and the company will then make a decision on what will happen on September 9th this year. While there’s almost no chance that the customers will see all of their Bitcoins back, it is positive that something is done in the case, unlike other Bitcoin exchange sites who closed shop without letting customers filing claims.

In the end, it doesn’t really matter how large a portion of the Bitcoins that the customers will receive back, they will still lose money. The Bitcoin was valued much higher when Mt. Gox went bankrupt than it is now, but for those who uses the Bitcoin without thinking of its fiat-money value, it is still a lot better than getting nothing back at all.

So if you were a customer at Mt. Gox, visit claims.mtgox.com and fill in the claim. It doesn’t take long and you have nothing to lose by doing it.