Major US cryptocurrency exchange Coinbase said Japan’s tighter regulations towards cryptocurrency would give it an advantage, signaling the company’s confidence in securing the regulatory approval for Coinbase Japan.
Japan has been long considered a crypto friendly country, compared to its neighbor China. The country has had a large pool of retail investors interested in blockchain technology and crypto and light-touch government policies. Due to high-profile hacks, Japan has decided to increase its regulatory oversight over the cryptocurrency industry.
Mike Lempres, Chief Policy Officer at Coinbase, told the NIKKEI Asian Review that his company is committed to getting a license to operate in Japan and “it will certainly be in 2019.”
Coinbase was founded back in 2012 and currently has 550 employees. To date, the cryptocurrency exchange has 20 million accounts open, and in 2017, it brought in $1 billion in revenue.
“The Japanese government is more focused on security,” Lempres told the Asian Review. “That is good for us.”
Lempres says that the FSA is mostly concerned with security. The Chief Policy Officer states that within his company, there are dozens of employees that are entirely dedicated to just that. Lempres states that with Coinbase, 99 percent of the funds are stored offline, and the other one percent is held in a hot wallet that is fully insured.
However, the Japanese FSA might have a major stipulation in order to approve the crypto exchange, and Coinbase isn’t ready to budge on it. Lempres speculates that Japan will require the exchange to be managed within Japan, something Coinbase isn’t keen on doing.
“We have everything built to protect our storage… in the U.S.,” said Lempres. “We won’t do anything to even raise possibility of a hack. It would be hard for us to duplicate what we do in the U.S. today in Japan and other countries.”
Moving operations overseas would pose for additional security risks for Coinbase. Currently, the FSA has 160 companies that are seeking approval, and the regulator hasn’t approved an exchange since December of 2017.
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