Tax authorities in Japan launches an investigation on Meijo Gakuin Educational Corporation for allegedly embezzling funds to invest in cryptocurrency. Japanese newspaper The Mainichi reported that almost $1 million was lost in the investment scandal.
The report said that Meijo Gakuin board members were instructed by its chairwoman to transfer funds to the institute’s affiliates. The fund was then withdrawn and invested in cryptocurrency.
Meijo Gakuin Educational Corporation has declined to comment on the issue. But, the chairwoman of the school stepped down last June over the case.
This incident of crypto scam follows other big-time bitcoin hacks and heists in Japan. Bitpoint, a licensed Japanese cryptocurrency exchange, lost $32 million in crypto assets in a bitcoin hack last July. As a result, the country urged for new regulations concerning the blockchain and cryptocurrency market.
Call For New Crypto Policies
Japanese Deputy Prime Minister Taro Aso in a statement said that it is time for regulators to implement new approaches dealing with cryptocurrencies. This is to combat the impending security threats in the market.
Speaking in the FINSUM financial technology conference on July 5, the minister stressed out the need for regulations adoption to keep up with emerging new technologies.
Japan’s Financial Services Agency (FSA) Commissioner Toshihide Endo has also been very supportive at curbing threats in the market. In a Reuters report, Endo was quoted saying that the agency aims to strike a balance between protecting consumers and promoting innovation within the industry.
According to Endo, FSA likes to see the Japanese cryptocurrency industry grow under appropriate regulation.
Japan’s Financial Services Agency
Financial Services Agency (FSA) regulates Japan’s cryptocurrency market.
As a leading market for cryptocurrencies such as Bitcoin and Etherum, Japan is the first nation to legislate the use of virtual money as a legal method of payment and to regulate the cryptocurrencies exchange under a licensing program. As a result, Japan attracts more blockchain investors from countries that ban cryptocurrencies.
In spite of the existing regulations set by FSA and other governing bodies concerning blockchain and cryptocurrency, high-profile heists still hit the Japanese cryptocurrency market, affecting millions of consumers.
Big-time Crypto Heists in Japan
Before the $32 million heist in Bitpoint, earlier last year, bitcoin wallet Coincheck has also suffered from the same tactic of cyber theft to the tune of $530 million. This incident is the biggest theft in the history of blockchain, superseding the $450 million Mt. Gox bitcoin hack in 2014.
Crypto exchange Tech Bureau Corp also lost a staggering amount from a cyber heist in September last year. The money lost has amounted to $60 million.
In 2018 alone, Japan recorded over 7000 suspicious cryptocurrency transactions. Japan’s National Police Agency reported that some users with different names and birth dates shared the same ID photo. Others appeared to log into their accounts from overseas even though their listed addresses were in Japan.
This major incidents in the Japanese cryptocurrency market has highlighted the vulnerability of the industry toward attacks, putting it in close regulatory scrutiny.
SWIFT-like Network for Crypto
Japan, as reported by Reuters, is planning to spearhead the setting up of an international network for cryptocurrency payments. It is similar to the SWIFT network that banks are using to curb money laundering. According to the report, the international network for cryptocurrency will take place in the next few years.
Still Growing Japanese Crypto Market
Despite severe bitcoin incidents, Japan’s cryptocurrency still grows and attracts more and more investors. Ripple, a financial technology company, is reportedly investing a staggering $50 million in MoneyGram for its payment service.
Rakuten in August has also unveiled its crypto wallet, enabling Rakuten Bank users to make transactions for crypto asset trading.
The latest addition to the Japanese companies shifting to cryptocurrency is LINE, a famous messaging service. On September 17, it rolled out its cryptocurrency exchange, Bitmax, that supports Bitcoin (BTC), Ether (ETH), XRP, Litecoin (LTC) and Bitcoin Cash (BCH).