Japan's Cryptocurrency Exchanges Need Tighter Rules: Monex CEO

Written by:
Published on:

TOKYO (Reuters) - Japan's cryptocurrency exchanges should be regulated more like banks as they hold investors' assets while offering trading platforms, the chief executive of online brokerage Monex Group Inc said.  SCROLL DOWN FOR MORE

Monex, Japan's No.3 online brokerage, on Monday completed the 3.6 billion yen ($33.6 million) acquisition of Coincheck Inc - the exchange hit by a $530 million digital money heist - in the most significant move yet by a major financial company into Japan's crypto sector.

Coincheck, like many of Japan's other cryptocurrency exchanges, holds customers' assets as well as "matching" those who want to trade digital money.

"Japan's exchanges do both matching and custodial services - they're close to a bank," CEO Oki Matsumoto told Reuters in an interview. "To someone in the financial industry like myself, it's common sense that regulations will get stricter."

There are currently 32 cryptocurrency exchanges operating in Japan. While rules introduced last year require exchanges to keep customers' and company assets separate, the practice has not been clearly defined.

At online brokerages such as Monex, in contrast, the separation of assets is strictly enforced, with customers' cash and stocks kept at third-party custodians such as trust banks.  

Monex's purchase of Coincheck allows it to enter the cryptocurrency industry, using Coincheck's well-developed trading platform and customer base as a launch pad into a sector whose fast growth has attracted the attention of other firms.

Last week, Yahoo Japan said it would buy a stake in a Tokyo-based cryptocurrency exchange. Messaging app operator Line Corp is also looking to join the market, while Monex's larger rival competitor SBI Holdings Inc holds a license to run an exchange but has not yet begun operations.

Yen-based trades accounted for over half of worldwide bitcoin trades over the last 24 hours, according to data from cryptocompare.com.

As of March, 3.5 million Japanese trade digital money, regulatory data show, with a majority in the 20-40 year old age bracket coveted by financial firms as the country's population shrinks and ages.

The market has so far reacted positively to the gamble by Matsumoto, who held an account with Coincheck for three years before the exchange was hacked.

Monex shares have soared 66 percent since the brokerage said it was looking at buying Coincheck, touching their highest in a decade.

Still, Matsumoto, who mines cryptocurrencies, said few major companies would have had interest in the Coincheck deal.

"I don't think there would have been many firms ready to do so," he said. "It's an issue for management."

(Reporting by Taiga Uranaka and Thomas Wilson; Editing by Kim Coghill)


Business/Financial News

Betting With A Bookie

If youíre a person that likes to bet on sports there are a few options that you can utilize in order to make wagers, such as going to an actually Casino, finding an online sportsbook, or finding a local bookie. 

Professional Bookie Software

If you are a person that likes sports and betting and likes to actually make money from it then using professional bookie software in order to book action could prove to be a great opportunity.

How To Become A Sports Bookie Through A Pay Per Head Service

How To Become A Sports Bookie Through A Pay Per Head Service

Achieving your dream of owning your own sports bookie agency is now possible through our Top Pay Per Head service.

Getting the Most Out of Your PPH Service

Getting the Most Out of Your PPH Service

Now that sports betting has become every day, ordinary topic of discussion on popular sports stations like ESPN, TSN and pretty much every local sports provider on television, it’s time to cash in.

7 Reasons Why You Should Use Bookie Software to Run Your Sportsbook

Today it’s possible to run a world-class sportsbook even if you’re a one-man-show. You can actually rival most online sportsbooks by using bookie software to run every aspect of your operation.