Japanese regulators saw a significant increase in cryptocurrency-related enquiries in 2017 compared to the previous year, industry website Coindesk has reported, citing data from Japan's Consumer Affairs Agency (CAA).
The data, disclosed at the second cryptocurrency exchange study group meeting hosted by Japan's Financial Services Agency (FSA) on Friday, shows that Japanese consumers filed a total of 2,769 domestic enquires on topics such as cryptocurrency trading and initial coin offerings. This is nearly twice as much as the number of crypto enquiries filed in the previous three years - 847 in 2016, 440 in 2015 and 186 in 2014. The FSA, Japan’s financial watchdog, noted that the majority of the enquiries focused on concerns over the security measures employed by crypto exchanges, as well as the legitimacy of certain ICO projects.
The ability of Japanese crypto exchanges to ensure that the funds of their customers are protected have been brought into question after some $500 million worth of NEM tokens were stolen from the Coincheck trading platform in January. Following the incident, the FSA conducted a thorough probe into the crypto trading businesses operating in the country and issued a wave of punitive measures, including temporary suspension orders, against exchanges whose performance was deemed unsatisfactory.
In response to the increased regulatory pressure, Japan’s registered exchanges last week formed a new self-regulating body aimed at restoring confidence in the local digital currency sector. During its first meeting last Monday, the organisation, called the Japanese Cryptocurrency Exchange Association, said that it would seek to develop comprehensive rules regarding customer protection and internal controls. Members of the association will be required to comply with these rules, as the group also intends to introduce penalties, in order to punish activities that undermine the integrity of the industry.
The group’s leadership also indicated that the association would aim to offer help and advice on the development of the crypto exchanges that still operate without a full licence from the FSA.