Coinbase Optimistic on Japan’s Crackdown on Cryptocurrency

Cryptocurrency exchange giant Coinbase isn’t concerned that Japan’s Financial Services Agency (FSA) has begun to view the crypto trading industry with a more cautious eye in the wake of several high profile exchange hacks on the regulatory agency’s watch in 2018.

Increased scrutiny of Crypto exchanges applying for virtual currency licenses would give the firm a leg up on the competition.

“The Japanese government is more focused on security,” Mike Lempres, Coinbase’s chief policy officer said. “That is good for us.” Discussions with the FSA are “going well,” he continued. “We are committed to getting it done. It will certainly be in 2019.”

That is a very strong statement considering that the FSA has not approved a virtual currency license since Dec. 2017, mainly due to hacks that have occurred on Coincheck and Zaif in this year.

These hacks will increase the demand for firms with a trustworthy track record. A theft insurance scheme is definitely required and there are a few startups working to accomplish this.

Lempres explained that Coinbase gives a high priority to securing client assets as many of their employees work full-time on asset security.

Issues could be raised if the FSA states that they would want to physically store its assets in the country with Coinbase Japan so that the agency can easily monitor them.

To the above scenario, Lempres says “We have everything built to protect our storage… in the U.S. We won’t do anything to even raise the possibility of a hack. It would be hard for us to duplicate what we do in the U.S. today in Japan and other countries.”

CCN reported in June that Coinbase was plotting an expansion into Japan, with the exchange operator tapping former Morgan Stanley Japan investment banker Nao Kitazawa to serve as chief executive of Coinbase Japan.

It was reported last week that Tiger Global, a major UK hedge fund was close to completing a $500million investment in Coinbase. This would value Coinbase at $8 billion, cementing its status as not only one of the largest cryptocurrency companies but also one of the world’s most valuable privately-held tech companies.

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