Breaking news out of Japan today comes as yet another cryptocurrency exchange is hacked, seeing around $60 million worth of Bitcoin, Bitcoin Cash and MonaCoin lifted from Zaif, a Japanese based cryptocurrency exchange.
We covered this story a little earlier on so therefore won’t harp on about Zaif too much. The big issue here is that when you actually assess the full scale of the damage of these hacks in Japan, the findings are frankly shocking.
Before we delve into this, we must also highlight that Japan is one of the few countries that have specific regulations for cryptocurrencies, most of which exist on the crypto exchanges themselves. These regulations have been established to make cryptocurrency investment safer and easier for customers in Japan, though when we consider the true level of the hacks that has taken place in the first 6 months of 2018 alone, we have to ask ourselves, are these regulations working?
In terms of crypto adoption, yes, these regulations are great, they nurture a positive approach to cryptocurrency that continues to allow people to invest, however, in terms of cryptocurrency exchanges, perhaps we need to see some changes before Japanese exchanges can be regulated efficiently?
According to The Next Web, by the first 6 months of 2018, around $540 million in various cryptocurrencies has been stolen from Japanese cryptocurrency exchanges. Granted, the majority of this came from the Coincheck hack in January, however the figures presented are still super startling. If we add today’s hack onto the tally, as it stands, that’s around $600 million lost.
Furthermore, in the wake of today’s news, the Japanese National Police Agency have made a statement that confirms the reported incident rate regarding cryptocurrencies has tripled to 158 compared to this time last year. Interestingly though, 120 of these incidents had been recorded before June, so at the very least, the rate of these crimes seems to have reduced somewhat over the past few months.
What next for regulation?
Perhaps regulation isn’t the issue, maybe the issue is exchanges and traders not adhering to the regulations. Moreover, maybe the issue is actually a lack of education, which is causing some people to slip up?
These crimes aren’t going to stop. Worldwide, cryptocurrency related crime is always going to be an issue that plagues our community, therefore why regulate against it, surely, it makes more sense to arm the citizens with the skills and knowledge they need to protect themselves?
Regulation isn’t going to see an end in Japan. After today’s news we might expect to see some changes made, but these changes will only clamp down further on the exchanges. In terms of individual traders, they will no doubt be left alone. I hope to see some new programes unrolled in Japan that aim to educate, when this happens, the rest of the world might even follow suit (wouldn’t that be nice).
One thing that is clear – we need to find a way to stop this, otherwise the rest of the world will never take crypto seriously, that’s a bad thing indeed.