Uniform global curbs on cryptocurrency trading may be hard: BOJ official

UNTV News   •   January 26, 2018   •   3137

FILE PHOTO: Photo illustration of Bitfinex cryptocurrency exchange website taken September 27, 2017. Picture taken September 27, 2017. REUTERS/Dado Ruvic/Illustration

TOKYO (Reuters) – Policymakers around the world may debate ways to deal with the volatility of bitcoin and other cryptocurrencies but imposing global, across-the-board regulations on their trading won’t be easy, a senior Bank of Japan official said on Thursday.

South Korea and China have tightened regulations but Japan wants to ensure any rules that it adopts won’t hinder innovation, said Hiromi Yamaoka, head of the Japanese central bank’s division on payment and settlement systems.

“There’s undoubtedly growing interest among global policymakers on how to deal with cryptocurrencies,” Yamaoka, whose division also oversees cryptocurrencies, told Reuters.

“Japan’s approach would be to think about how to curb excesses without discouraging innovation,” he said.

Bitcoin BTC=BTSP soared more than 1,700 percent last year to a record high as investors snapped up the virtual currency on expectations of further steep gains.

Alarmed by the global boom, national authorities across the globe, particularly in Asia, have attempted to put the brakes on trading of cryptocurrencies. Fears of a wider clampdown pushed bitcoin down nearly 20 percent last week.

Yamaoka said while there were some “speculative moves” in the cryptocurrency market, it was hard to say whether bitcoin was experiencing a bubble because cryptocurrencies have no underlying assets to measure their real value.

It will also be hard to define which cryptocurrency needs to be regulated and for countries to agree on a uniform set of rules, given it isn’t easy to come up with common regulations even for traditional banking services, he said.

“It’s uncertain whether global cooperation would mean global regulation…It may mean sharing a common view on the risks involved in cryptocurrency trading and seeking to send out a common message,” he said. “Global harmonization may not necessarily mean global regulation.”

NO MAJOR PROBLEMS SO FAR
France has urged for debate on bitcoin at a meeting of G20 major economies in Argentina in March. Germany has also said any attempt to regulate cryptocurrencies must be on a global scale.

Yamaoka said while cryptocurrency prices have been volatile, they have yet to disrupt Japan’s banking system as cryptocurrencies are hardly used for payments and settlements.

As long as they are not used much for payments and settlements, they won’t affect monetary policy much, he said.

But policymakers need to check how much exposure banks have, how much funds are investing in them globally, and how much leverage investors are taking, Yamaoka added.

“So far, I don’t think there are any big problems. But we need to look carefully,” he said.

“If the exposures turn out to be huge, we may need to follow up and work to maintain financial stability together with the Financial Services Agency.”

Japan’s global share of the bitcoin market jumped after a clampdown last year by Beijing. The government in April granted cryptocurrencies legal status as a means of settlement and recognized several digital currency exchanges.

Additional reporting by Yoshifumi Takemoto; Editing by Jacqueline Wong

EXCLUSIVE: G20 financial heads to urge crypto-asset monitoring to safeguard financial stability

UNTV News   •   March 15, 2018

Cryptocurrencies are seen on a website that tracks the value of initial coin offerings (ICO) in this illustration photo taken September 5, 2017. REUTERS/Thomas White/Illustration

BRUSSELS (Reuters) – The world’s financial leaders will call on international standard-setting bodies on March 20 for stronger monitoring of crypto-assets and to assess the need for a multilateral response as such assets could at some point threaten financial stability.

The call appears in a draft communique prepared for the meeting of finance ministers and central bank governors of the world’s 20 biggest economies in Buenos Aires on March 19-20, seen by Reuters.

The financial leaders will say the technological innovation behind crypto-currencies has the potential to improve the efficiency and inclusiveness of the financial system.

“Crypto currencies, however, raise issues with respect to consumer and investor protection, tax evasion, money laundering and terrorist financing. At some point they could have financial stability implications,” the draft communique adds.

“We agree that international standard setting bodies strengthen their monitoring of crypto-assets and their risks… and assess whether multilateral responses may be needed.”

Regulators globally have raised the alarm over cryptocurrencies, saying they may aid money laundering and terrorist financing, hurt consumers and undermine trust in the global financial system.

Japan was the first country to adopt a national system to oversee cryptocurrency trading. It carried out checks on several exchanges this year after the theft of $530 million from one exchange, Coincheck Inc, in January.

France and Germany have said they will make joint proposals to regulate the bitcoin cryptocurrency market.

The head of the European Union’s watchdog said a short-term strategy could be to focus on applying anti-money laundering and terrorist financing rules, warning consumers of the risk of trading in cryptocurrencies and preventing banks from holding them.

The U.S. Securities and Exchange Commission said last week that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules, in a further sign regulators are cracking down on the digital currency sector.

In a statement, the SEC said these “potentially unlawful” platforms may be giving investors an unearned sense of safety by labeling themselves as “exchanges.” The regulator said these platforms need to register with the SEC as a regulated national securities exchange or as an alternate trading system, or ATS.

Virtual currencies have existed for years but speculation in them has recently ballooned – along with scams promising investors returns of over 1,000 percent in weeks.

In a time of volatile markets, hackers are also active in the sector.

Bitcoin, the best known virtual currency, lost over half its value earlier this year after surging more than 1,300 percent last year.

Reporting By Jan Strupczewski; Editing by Hugh Lawson

Singapore explores rules to protect investors in cryptocurrencies

UNTV News   •   March 2, 2018

Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 13, 2018. REUTERS/Dado Ruvic/Illustration

SINGAPORE (Reuters) – Singapore’s central bank is assessing whether additional regulations are required to protect investors in cryptocurrencies, an official said in a speech released on Thursday.

The city-state – which is aiming to be a hub for financial technology and so-called initial coin offerings in Asia – does not regulate virtual currencies and last year called for the public to exercise“extreme caution” over investment in cryptocurrencies.

Its central bank does regulate activities involving virtual currencies if they pose specific risks. For example, it imposes anti-money laundering requirements on intermediaries providing virtual currency services.

“We are assessing if additional regulations are required for investor protection,” Ong Chong Tee, deputy managing director (Financial Supervision), Monetary Authority of Singapore said.

Other countries such as South Korea, where trading in cryptocurrencies is more popular, are looking at ways to regulate that activity.

Reporting by Aradhana Aravindan and John Geddie; Editing by Kim Coghill

Cryptocurrency traders to launch lawsuit against Coincheck on Thursday – lawyer

UNTV News   •   February 14, 2018

Cryptocurrency exchange Coincheck’s signboard is pictured in front of a building where their office is located in Tokyo, Japan February 2, 2018. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) – A group of cryptocurrency traders will file a lawsuit against Coincheck Inc on Thursday over last month’s theft of $530 million (£382 million) in digital money from the Tokyo-based exchange, a lawyer representing the claimants said.

The ten traders will file the claim at the Tokyo District Court over Coincheck’s freezing of cryptocurrency withdrawals, Hiromu Mochizuki, a lawyer representing the plaintiffs, told Reuters.

The traders will request that Coincheck allows them to withdraw cryptocurrencies to “wallets” – folders used for storing digital money – outside the exchange, Mochizuki said. The group may launch a second lawsuit at the end of the month to claim for damages over the heist, he added.

Coincheck representatives did not immediately respond to phone and emailed requests for comment.

The Coincheck incident highlighted the risks in trading an asset that policymakers are struggling to regulate, and has renewed the focus on Japan’s framework for overseeing these exchanges.

The Tokyo-based exchange, which froze all withdrawals of yen and digital currencies following the theft, resumed yen-withdrawals from Tuesday, according to posts on Twitter.

Coincheck said on Friday it would allow customers to withdraw yen after confirming the integrity of its system security. It added it would keep restrictions on cryptocurrency withdrawals until it could guarantee the secure resumption of its operations.

Coincheck is set to file on Tuesday a report with regulators on the heist, the safety of its systems, and measures it will take to prevent a repeat.

Reporting by Thomas WilsonEditing by Shri Navaratnam

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