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International Crypto Standards: Will They Come From the Community or Governments?

International standards for crypto are coming, but at what cost to innovation?

There are over 2,000 different coins in existence right now, each with their own unique characteristics, uses and communities, while there are masses of different blockchains, platforms and exchanges — all of which answer to competing needs and values. On the one hand, this profusion is one of the key driving forces behind innovation in the crypto sphere. But on the other, it arguably acts as a block against widespread adoption, as the lack of unified standards means that some morally questionable endeavors give the rest a bad name.

The past year has seen an intensifying push toward producing international standards for the cryptocurrency industry. Groups such as Global Digital Finance have risen with the aim of fostering universal standards on how crypto platforms are run, just as groups like the Blockchain Association and CryptoUK are now focused mostly on standards at a national level. Such organizations count the likes of Coinbase, Bitstamp, Circle and others as members, despite often being less than a year old.

However, while holding the promise that crypto will avoid stringent government regulation by learning how to regulate itself, there’s also a concern that global standards might hamper innovation, and that crypto — almost by nature — is not meant to be standardized.

Global Digital Finance

As Teana Baker-Taylor, the executive director of Global Digital Finance (GDF), told Cointelegraph, the London-based association aims “to demonstrate that self-governance and driving best practice is critical for the industry’s consumers and their confidence in crypto assets, as the sector continues to mature, and in concert with developments in regulation.”

In other words, GDF is seeking to develop voluntary guidelines and codes of conduct for exchanges, token sales, wallet providers, cryptocurrencies and ratings websites, and while it was launched only in March, it already has a strong roster of members.

At the end of October, payments company Circle (and owner of Poloniex) joined it as a founder member, adding itself to a list that includes Coinbase, R3, ConsenSys and Diginex. Meanwhile, Baker-Taylor affirms that the association has also begun having dialog with lawmakers and public institutions.

“With over 250 individuals and firms, global regulators and policy makers have paid attention to the GDF Code and the commitment of the community, and this is an important start. Understandably, the signal from many regulators has been mixed, but most we are engaging with are supportive of maintaining an open dialogue to ensure they do not stifle this important innovation.”

Yet, GDF isn’t only working on codes of conduct for token sales and crypto-exchanges. They’re also busy devising a taxonomy of cryptocurrencies, which seeks to divide coins into three broad types: payment tokens, financial asset tokens and consumer tokens.

Given that there is plenty of confusion and conflict among the world’s governments on how to define crypto, this attempt to produce a clear taxonomy of cryptocurrencies is much needed. However, seeing as how such organizations remain largely averse to classifying cryptocurrencies as money and/or assets, there will remain the worry that GDF’s taxonomy (and codes) may simply be disregarded by governments and regulators.

Governments

Despite possible opposition or resistance from governments, the groups like the GDF could have emerged precisely because of increasing government interest in crypto regulation. Anyway, their emergence at such a time presents the crypto world with a golden opportunity to get involved in the shaping of government policy.

In October, the Financial Action Task Force (FATF) — an intergovernmental group established by the G7 to combat money laundering — adopted a variety of changes to its standards concerning the regulation of virtual assets. And encouragingly for the crypto industry, these new recommendations were focused specifically on preventing money laundering and the financing of terrorism, leaving plenty of freedom for exchanges, token issuers and crypto-services to operate in accordance with the needs of their users and own logic. It said in its recommendations from October:

“The FATF Recommendations require monitoring or supervision only for the purposes of AML/CFT [Anti-Money Laundering/Countering Financing of Terrorism], and do not imply that virtual asset service providers are (or should be) subject to stability or consumer/investor protection safeguards, nor do they imply any consumer or investor protection safeguards.”

Put simply, the FATF sees no reason to do anything about the volatility or decentralization of cryptocurrency, which implies that it wants to leave the much of decentralized nature of crypto intact. That said, other governmental groups want to do more than simply prevent crypto from being used for crime or terrorism.

For example, Felix Hufeld — the chairman of the German Federal Financial Supervisory Authority (BaFin) — affirmed his view in October that the global community needs to produce international standards governing the handling of ICOs:

“The number (of ICOs) and the volume (of money) per ICO are both getting higher. Investors have mostly minimal rights.”

Still, while this could foreshadow a push for intergovernmental standards that dictate what ICOs can and can’t do, such moves remain at a very preliminary stage. And because governments have been slow to act here, this provides an empty space which groups like GDF – or the newly formed Blockchain for Europe association (which includes Ripple and the NEM Foundation as members) – could advantageously fill to the benefit of the wider crypto industry.

National beginnings, international endings

And while the world’s governments and governmental bodies slowly wake up to the idea of regulating cryptocurrencies at a global level, the crypto industry is increasingly producing new trade institutions that are beating them to punch when it comes to developing standards.

In March, CryptoUK was established, with the aim of producing self-regulatory standards for the United Kingdom’s cryptocurrency industry. But its chairman, Iqbal V. Gandham, tells Cointelegraph, there’s also an appetite at CryptoUK for international coordination.

“CryptoUK’s focus since our launch earlier this year has been on the U.K. — securing proportionate regulation here is our priority, but we support collaboration on regulatory approaches internationally, in particular learning the lessons — both good and bad — from other jurisdictions.”

Given that most other self-regulatory trade bodies — such as the Blockchain Association, the Japan Virtual Currency Exchange Association and the Blockchain Foundation of India — are working primarily at the national level, global collaboration on regulatory approaches will be vital if the crypto industry is to enjoy uniform international standards.

And to an increasing extent, there does appear to be a growing willingness among crypto-related companies to work with each other on developing (international) standards. In August, the Gemini, Bitstamp, Bittrex and bitFlyer exchanges announced the formation of the Virtual Commodity Association Working Group. And like Global Digital Finance, its aim is to devise global industry standards on how crypto-exchanges are run and cryptocurrencies are traded.

Standards equals less innovation?

There is, then, every reason to believe that the crypto industry will, sooner or later, develop international standards and adopt them at large scale. But the question remains: Will such standards simply give the public greater confidence in crypto, or will they also have the unfortunate side effect of constraining innovation?

“In many industries, regulation and standards are seen as stifling innovation. However, in the crypto-assets market, regulatory and legal ambiguity poses challenges for growth.  Clarity around the ‘rules of the road’ will better enable innovators to access new ways of accessing global capital and support emerging nascent business models with greater confidence.”

– Teana Baker-Taylor, executive director of Global Digital Finance

Similarly, there’s a risk that standards could put compliant companies at a disadvantage compared to those corporations or cryptocurrencies that simply (and perhaps illegally) flout them. Given that the decentralized nature of cryptocurrency provides people and groups with greater scope to disregard centralized authority, this is a real danger.

However, once international standards are in place and recognized, it becomes much likelier that the companies that do observe them will have a much better chance of working with and influencing regulators — something which will ultimately put them at a competitive advantage. And as Teana Baker-Taylor concludes, there’s a very strong appetite among crypto-related firms to foster and follow strong universal standards.

“GDF’s community is made up of hundreds of individuals and businesses from around the world who share a vision of growing a mature, stable, transparent and fair crypto-asset industry. The desire and commitment of the community to instil and drive sound business practices is enormously compelling and in our experience, is far more prevalent than those who do not ascribe to this mindset.”

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Crypto Exchanges Join Winklevoss Backed Self-Regulatory Group

A group of cryptocurrency exchanges has joined up with Gemini founders Cameron and Tyler Winklevoss to launch a new industry-focused self-regulatory organization (SRO).

First proposed in March, the Virtual Commodity Association aims to “foster financially sound, responsible and innovative virtual commodity markets” by developing industry standards and encouraging cryptocurrency exchanges to prevent market manipulation and other fraudulent actions.

On Monday, the proposal took its next step, with Gemini launching a working group to begin developing these standards.

As explained by an introductory post on the VCA’s website, the Commodity Futures Trading Commission (CFTC) has legal jurisdiction over commodities, such as bitcoin and ether, though it does not necessarily have jurisdiction over cash and spot markets derived from commodities.

However, under the Commodity Exchange Act (CEA), the CFTC can regulate fraud or market manipulation.

The post explained:

“The purchase and sale of commodities in the spot/cash markets has been historically exempt from the CEA and CFTC jurisdiction. Nevertheless, cash markets for virtual commodities – as it is a less well known industry – can benefit from an additional layer of oversight. We believe that adding this layer can provide even more protection for consumers and ensure the integrity of these markets and growing industry.”

To that end, the VCA will appoint a board of directors to oversee the organization, which will commit to remaining a non-profit, independent group that can “help set and adopt global standards and best practices.”

Image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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US: Four Crypto Exchanges Establish Self-Regulatory Association for Digital Commodities Industry

Crypto exchanges Gemini, Bitstamp, Bittrex, and bitFlyer USA have announced the creation of a self-regulatory organization for digital commodities, such as cryptocurrencies, Business Insider reports August 20.

The new group, dubbed “Virtual Commodity Association Working Group,” aims to help large-scale investors get more comfortable with the crypto market, work on formulating industry standards, and “be a precursor to the formation of a self-regulatory organization for digital commodities like [B]itcoin and [E]thereum” Business Insider reports.

The first meeting of the newly created association is set to take place in September this year. Business Insider quotes its source as explaining the kinds of problems the group wants to help solve:

“In equities, securities exchanges have their own organization to come up with common standards and jointly respond to declarations by regulators. The new group could serve as the equivalent for the crypto world by coming up with best practices for the industry, looking at ways to boost liquidity, and stamping out market manipulation.”

The Association has been founded by four U.S.-based cryptocurrency exchanges: bitFlyer, Gemini, which was established in 2014 by the Winklevoss brothers, Bitstamp, and a cryptocurrency exchange and wallet service Bittrex.

Meanwhile, one of the largest U.S. crypto exchanges Coinbase is not a part of the group, and has refused to comment on the initiative, Business Insider claims.

Earlier this summer, Winklevoss twins had won a patent for a system of exchange-traded products (ETPs) that could hold “digital assets” and “other products and/or services related to ETPs holding digital assets.”

Back in spring 2018, cryptocurrency exchange Gemini had announced its partnership with Nasdaq to monitor markets and mitigate the consequences of market manipulation, Cointelegraph reported April 25.

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Top Crypto Exchanges Join Hands To Tackle Regulatory Issues

Just weeks ago, the Winklevoss Twins’ Bitcoin ETF proposal was sadly denied by the SEC, with the US regulatory body citing concerns of manipulation and security as primary reasons why such an ETF would not be successful. Following the disappointing turnout for the final verdict, the twins took to Bloomberg to declare that they were not deterred by the SEC’s decision and would continue to trudge forward.

And it seems with a recent announcement that the twins are back, and are seemingly ready to tackle regulatory worries in the crypto community. In late-July, Ethereum World News reported that representatives from Gemini met with the Nasdaq, along with a variety of other firms, to tackle the regulatory development of the crypto industry.

With the arrival of a recent announcement, it seems that Gemini has kept with the theme of pro-regulation in the cryptosphere. As per a press release issued by the so-called “Virtual Commodity Association (VCA) Working Group” will work towards becoming a prominent self-regulatory body for “virtual commodity marketplaces (exchanges).”

The VCA will be initially composed of Bitstamp, BitFlyer, Bittrex, and Gemini, which all are home to a substantially sized American audience.

Representatives from the aforementioned four firms are scheduled to exchange formalities for the first time in September, where they will also flesh out the idea and aspirations of the newly-established VCA.

According to a somewhat pre-established meeting plan, the VCA will first highlight the guidelines for membership of the association. Secondly, exchange representatives will begin to create an outline for industry “best practices” and rules, that will only help to propagate “transparency, liquidity, risk management, and fairness.” Thirdly, member bodies will draw out a series of guidelines to address “member conflicts of interest, client communications, client disclosures, and record keeping.” And last but not least, the VCA members will do its best to establish a strong, dedicated and non-bias team of individuals to run this consortium.

Although this move is somewhat of a jab at governmental-operated bodies, the CFTC expressed its excitement for the VCA. CFTC commissioner Brian Quintez stated:

Given the absence of federal oversight jurisdiction in the crypto market, in February and again in March of this year I called on the crypto platform community to come together and develop a self-regulatory organization-like entity that could develop and enforce rules. Today’s announcement is a positive step towards that realization.

For the time being, this group will be headed by Maria Filipakis, who previously worked for the New York Department of Financial Services, where she was an integral part of the NYDFS’ move to establish the coveted “BitLicense.”

It is widely speculated that the introduction of a self-regulating conglomerate, like the VCA, will hail in another round of institutional interest, as traditional firms may realize that the crypto industry isn’t as rife with anti-regulatory madness as they may think.

Photo by Hunters Race on Unsplash

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Data Shows US Dollar, Not Japanese Yen, Is Dominating Bitcoin Trade

Japan may not be quite the cryptocurrency powerhouse that the world thinks it is.

A deep dive by CoinDesk has found methodological flaws in widely-cited bitcoin exchange data that appear to overstate the importance of the Japanese yen as a trading pair. Our analysis of trading data collected from July 26-30 suggests that the U.S. dollar, not the yen, is the dominant currency traded for bitcoin by a wide margin.

Currently, analytics sites CryptoCompare and Coinhills offer a breakdown of bitcoin trading by currency pair, and until recently the data from both sites indicated that over 50 percent of bitcoin trading is denominated in Japanese yen.

The problem is that the vast majority of yen-denominated transactions are not “spot” trades of actual bitcoin for yen. Instead, they are derivative products: contracts that derive their value from the performance of an underlying asset.

In other words, the parties to these transactions are betting on the price of bitcoin, but no bitcoin is actually changing hands. While there’s nothing inherently wrong with these contracts, selectively mixing derivative and spot volumes can paint a misleading picture.

Specifically, Coinhills and CryptoCompare, whose data has been cited by major outlets such as Bloomberg and the Wall Street Journal, did not distinguish between the spot and derivative volumes of Bitflyer, Japan’s largest exchange. In other words, both types of trading were counted toward the total for yen-bitcoin activity.

However, their calculations did exclude equivalent dollar-denominated derivative markets such as those on Bitmex.

As a result, the yen and dollar totals were not an apples-to-apples comparison, since the former includes derivative trades and the latter does not. When correcting for the misclassification, the data compiled by CoinDesk paints a starkly different picture.

To be sure, Japan remains a global hotspot of cryptocurrency interest, thanks in part to a law that took effect early last year recognizing bitcoin as legal tender and regulating the country’s exchanges. And the CoinDesk analysis covers only a five-day period, so it isn’t quite conclusive evidence that the U.S. dollar underpins most cryptocurrency trading.

Still, after being contacted by CoinDesk, CryptoCompare changed its methodology, and its data now shows the dollar out-trading the yen.

Further, the inconsistencies in how different types of transactions are counted across exchanges, and the wildly different results when these are addressed, underscore the nascent state of the cryptocurrency industry’s data practices.

Devilish details

As mentioned, the issues with currently available data stem from the classification of Bitflyer’s various exchange markets.

Bitflyer handles both spot trades and derivative trades, but it is the sheer scale of these derivatives trades that can distort market data.

During the time period of CoinDesk’s snapshot, Bitflyer’s Lightning FX derivatives service processed the equivalent of nearly $2 billion in yen-denominated trades every day. These derivative trades accounted for 90% of CryptoCompare’s observed yen trading and 85% of Coinhills’ yen trading.

By itself, the inclusion of derivatives volume would not necessarily be a problem if  CryptoCompare and Coinhills also counted dollar-denominated derivatives markets when tallying the total volumes. Trouble is, they don’t.

For perspective, Bitmex, the largest dollar-denominated derivatives market, recently set a record of over $8 billion of contracts traded in a single 24-hour period (July 23-24), dwarfing Bitflyer’s volumes. These derivative trades are uncounted in CryptoCompare’s and Coinhill’s respective measures of total USD-BTC trading.

To create a more balanced comparison of global trading activity, CoinDesk took a snapshot of both the spot market, which excludes all derivative trading, and the total market, which includes all spot trading and the dollar and yen volume at the four major derivative exchanges: Bitflyer’s Lightning FX, Bitmex, CME and Cboe.

Both these measures indicate that the U.S. dollar dominates worldwide, with the yen a distant second.

For example, the dollar accounted for only 17 percent of CryptoCompare’s tally and 21 percent of Coinhills’ figure for those five days in July. In CoinDesk’s apples-to-apples snapshot, by contrast, the dollar makes up 56 percent of spot market trading and 68 percent of total trading when including major global derivative markets.

Regulatory implications

The findings are notable as the spot market is particularly relevant to officials concerned about potential illicit uses of cryptocurrency.

Any unsavory actor attempting to make use of ill-gotten gains today must rely on spot exchanges to convert cryptocurrencies into fiat currency.

The dollar’s role in this exchange ecosystem extends the reach of the U.S. government. Just as the dollar’s preeminence in the international financial system gave U.S. regulators the leverage they needed to shape global anti-money laundering (AML) practices in the wake of 9/11, the dollar’s importance in global fiat-to-cryptocurrency trade could give them outsized influence as governments around the world mull new regulatory frameworks for cryptocurrencies.

For example, Japanese officials have thus far led the push for global cryptocurrency AML standards in international forums like the G20 and the Financial Action Task Force, but continued dollar dominance of cryptocurrency trading could inspire a more active U.S. presence.

Yaya Fanusie, director of analysis at the Center on Sanctions and Illicit Finance at the Foundation for Defense of Democracies and co-author of a report on bitcoin laundering, told CoinDesk:

“If your assumptions are correct and the dollar in fact dominates on crypto exchanges around the globe, this data could prompt U.S. regulators to take a more active role.”

Data deluge

To be fair, the uncertainty, complexity and constant churn of the exchange market leaves analytics sites like CryptoCompare, Coinhills and others struggling to keep up. In such an environment, errors are bound to occur, even with data from large, highly regulated exchanges like Bitflyer.

When contacted about the inclusion of Bitflyer’s derivative data, both CryptoCompare and Coinhills acknowledged that data from Bitflyer’s Lightning FX derivatives market was the root cause of their observed yen dominance.

“We do currently count Bitflyer’s Lightning FX volume, and thank you very much for pointing this out. We plan on excluding Bitflyer’s futures volumes from calculations at the end of this month,” Constantine Tsavliris, an analyst at CryptoCompare, told CoinDesk.

Subsequently, CryptoCompare, which recently announced a data partnership with Thomson Reuters, indeed removed Biflyer’s derivatives market data from its calculations.

A Coinhills representative stated that the company is exploring adding other major derivatives markets such as Bitmex.

While the industry continues to mature by the day, it remains the Wild West for all observers hoping to gather a clear image of the cryptocurrency exchange market.

For more data, research and analysis, check out CoinDesk’s recently released Q2 2018 State of Blockchain report.

Dollar vs. yen image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Japan: VPs of Crypto Self-Regulatory Body Quit After Receiving Exchange Compliance Orders

The two vice-presidents of Japan’s self-regulatory cryptocurrency exchange body have resigned after their exchanges received regulatory warnings, Cointelegraph Japan reports June 25.

Just a week after the Japan Virtual Currency Exchange Association (JVCEA) produced its first guidelines on industry best practice, Yuzo Kano and Noriyuki Hiroyuki announced they would be stepping down as vice presidents of the organization.

Kano and Hiroyuki are CEOs of bitFlyer and Bitbank respectively, both of which received business improvement orders from Japan’s Financial Services Agency (FSA) June 22.

Part of an ongoing tightening up of Japan’s cryptocurrency exchange sector, a total of six exchanges will now need to conform to strict requirements relating mostly to anti-money laundering (AML) and know-your-customer (KYC) regulations.

For bitFlyer, the FSA stipulated a raft of new measures, including “an effective management system […] to ensure proper and reliable operation of the business, as well as countermeasures against money laundering and terrorist financing.”

The JVCEA meanwhile appeared unfazed by the news, the statement promising it would continue on its mission.

“[W]e will continue to do our utmost to protect the interests of users and to promote the sound development of the virtual currency exchange industry, including the early establishment of voluntary regulation rules,” today’s statement concluded.

It so far remains unknown who will replace Kano and Hiroyuki, and whether their departure will affect the body’s future plans.

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Japan: Financial Watchdog to Issue Business Improvement Notices to 5 Crypto Exchanges

Japan’s Financial Services Agency (FSA) will be issuing business improvement notices to five registered cryptocurrency exchanges by the end of this week, Cointelegraph Japan reports Tuesday, June 19.

According to the FSA inspections, crypto exchanges BitFlyer, Quoine, Bitbank, BITPoint Japan, and BtcBox do not have the proper internal management systems, including their measures to prevent money laundering. BitFlyer, Quoine and Bitbank are some of the largest crypto exchanges both in the country and in the world, currently sitting at 27th, 18th and 20th places by trade volume, according to Coinmarketcap data.

When asked about the business improvement notices, BITPoint Japan told Cointelegraph Japan that there is “no such fact at the present time,” BitFlyer said they are “not in a position to comment,” Bitbank and Quoine said they could not answer, and BtcBox did not respond to a request for comment by press time.

Following the January $532 million hack of NEM from Japanese crypto exchange Coincheck, the FSA had begun inspections of crypto exchanges, issuing multiple business improvement notices and halting the operations of several exchanges as well.

Since April 2017, all crypto exchanges in Japan must be registered with an FSA license to operate. At the beginning of June, the FSA rejected a crypto exchange license application for the first time, citing concerns that the exchange — whose services had already been suspended twice this spring — didn’t provide adequate customer identity verification in the case of suspicious transactions.

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Binance, Bitfinex and More: New York Launches 'Inquiry' Into 13 Crypto Exchanges

New York’s attorney general is taking a closer look at some of the world’s most popular cryptocurrency exchanges.

Attorney General Eric Schneiderman announced the “Virtual Markets Integrity Initiative” on Tuesday, saying it was “a fact-finding inquiry into the policies and practices” of cryptocurrency trading platforms. Letters were sent to 13 exchanges, seeking information about their “operations, use of bots, conflicts of interests, outages, and other key issues,” according to a press release published on Tuesday.

“With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” Schneiderman was quoted as saying.

Letters were sent to the companies that operate GDAX, Gemini, bitFlyer, Binance, itBit, Gate.io, Huobi.Pro, Bitfinex, Bitstamp, Bittrex, Kraken, Tidex and Poloniex (the latter of which was recently acquired by Circle).

According to Schneiderman, the inquiry is also focused on key issues such as “internal controls and safeguards to protect consumer assets.” In statements, Schneiderman’s office said that the effort would also focus in part on the exchanges that explicitly do not operate in New York because of regulatory concerns.

“We are aware that certain trading platforms have formal rules barring access in New York and may not have a license to engage in virtual currency business activity in New York. Among other topics, we are asking platforms to describe their measures for restricting trading from prohibited jurisdictions,” the announcement stated.

Eric Schneiderman image via a katz / Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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BitFlyer Exchange Toughens User Verification Amid Watchdog Scrutiny

BitFlyer, a major Japanese cryptocurrency exchange, announced Thursday that it will revise its trading and payment policies amid reports criticizing its existing know-your-customer procedures.

According to a company announcement, starting from April 26, users registering online will not be able to send cryptocurrency assets or withdraw Japanese yen until their identity and address have been confirmed with the receipt of a postal letter from the exchange.

Similarly, paying for goods with bitcoin through bitFlyer will also be disabled until users have received a letter that confirms they have passed the firm’s verification process.

The revised rule comes as a response to a report by Japanese media outlet Nikkei earlier on Thursday, which indicated that Japan’s Financial Services Agency (FSA) has raised concerns over what it considers a loosely enforced ID verification process on the bitFlyer platform.

Based on Nikkei’s report, the regulator said the cryptocurrency exchange has made it possible for users to start trading immediately after submitting a photocopy of their ID cards, while the platform has yet to fully confirm and verify users’ information. As such, the financial watchdog is concerned that the platform could be used for money laundering activities.

Although it denies being careless in complying with know-your-customer rules, the exchange said it is cooperating with the FSA to strengthen its existing anti-money laundering measures.

The move comes at a time when the Japanese regulator has been scrutinizing domestic cryptocurrency exchanges regarding their anti-money laundering and business registration compliance.

Just yesterday, the FSA issued an administrative penalty that ordered Japanese trading platform Blue Dream, which is still in the application process for business registration with the FSA, to suspend its operations until June 10.

The FSA said the firm had violated customer protection measures by soliciting investors for its own token, “BD Coin,” while not making it known to investors how the price of the token is determined.

The order came just days after the watchdog issued two other administrative penalties last Friday, similarly barring two exchanges from operation for two months.

FSA image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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BitFlyer Adds Computer Language Co-Creator as Advisor

BitFlyer has hired the co-creator of a programming language as an advisor to help with its scaling and enterprise blockchain efforts.

Tom Love, co-creator of the programming language Objective-C – perhaps most notably used by Apple for its OSX and iOS operating systems – will advise the cryptocurrency startup on both strategic and technology initiatives, chief operating officer Bartek Ringweski told CoinDesk in an interview.

Ringweski said bitFlyer particularly hopes to leverage Love’s experience in order to help it build on its ‘miyabi’ private blockchain, which he called “the fastest blockchain in the world” capable of handling 2,000 to 4,000 transactions per second.

The company now hopes to create a “programming language that would let developers interact with miyabi, and that is more familiar to them as if it were a traditional database,” Ringweski explained.

Asked what this language might look like, Love told CoinDesk:

“I have a strong bias toward things that are simple, clear and easy to understand, and that are successful. So I hope to help bitFlyer in exactly those same ways.”

Love started his career at General Electric Company and has also held executive management positions at ITT, IBM and Morgan Stanley, but the role at bitFlyer will be his first endeavor in the blockchain industry.

Despite this, Love said the company is a natural fit.

“I’ve had a history of connecting myself with important technologies dating back to the 1970s, and this looked like a similarly important and significant technology,” he said.

Ringweski said Love’s experience will help the company expand, though it already offers exchange services in 43 U.S. states, Japan and the EU.

“He’s a great person to help us on the technical front, but we can also benefit from his experience on the business and regulatory side,” Ringweski said. “He’s worked in highly regulated spaces.”

“I have a history of working inside large companies and starting small companies that have made a difference,” Love explained to CoinDesk, adding:

“So, I have a wealth of experience and a wealth of contracts that I can call upon to be helpful to the company in a variety of ways, like I’ve been for other companies in the past.”

Businessman miniature on motherboard image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.