With a projected annual income of $9.2 billion (1 trillion yen) from cryptocurrency trading taxes, the Japanese government refuses to let go of the ambition to lead the digital currency space in Asia and thus push the country’s economy forward, according to observers in the region. The intention remains despite the recent attack on Tokyo-based crypto exchange CoinCheck, which fell victim to the biggest coin heist on record after losing an estimated $530 million in NEM tokens to hackers two weeks ago.
Ken Kawai, government cryptocurrency adviser and partner at law firm Anderson Mori & Tomotsune, was quoted as saying:
“Innovation has been so fast that the government and bureaucrats until recently did not understand the functions of the blockchain or what a ‘cold wallet’ or a ‘hot wallet’ is. Japan's financial regulators are traditionally very conservative and never the first to move, but that has changed, and Japan wants to be friendly to fintech. It is just that nobody expected it to happen this fast.”
The CoinCheck heist highlighted the lax security at cryptocurrency exchanges, but regulators are now quickly catching up. In CoinCheck’s case, the exchange has been blamed for storing the NEM coins in a “hot wallet” instead of a “cold wallet,” which is more secure because it operates on a protocol that is disconnected from the Internet. The operator also failed to implement a multi-signature system for an added layer of security.
Japanese regulator to pay surprise visits to crypto exchanges
Last week, the Financial Services Agency (FSA) of Japan said it would conduct surprise on-site inspections at several digital currency exchange operators to check their security systems against hackers.
The announcement followed the raid by FSA inspectors in the offices of CoinCheck to monitor the operator’s ability to respond to a real-time crypto heist and inspected its security governance policies.
The agency also demanded that the remaining 31 crypto exchange operators in Japan file reports on their system risk management and virtual currency storage.
Source: https://cryptovest.com/news/japan-remains-intent-on-crypto-domination-despite-hack-woes/
