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Coincheck heist sheds light on Japan's rush to create cryptocurrency rules

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By Thomas Wilson and Takahiko Wada

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But proponents of its regulatory approach say the system and the hack were not connected.

"It's too much to say that the FSA or institutional design was lax because there was one hack," said former information technology vice-minister Mineyuki Fukuda, previously a supporter in parliament of promoting and regulating cryptocurrencies.

One hack is all that it took to steal another half-a-billion dollars, and just how many other hacks or attempted hacks have not been reported?

If the system and the hack were not connected, then who or what is to blame?

1 ( +2 / -1 )

As the guy in the article says, the FSA wouldn’t have a clue. They are a bunch of career bureaucrats, they aren’t the ones who innovate and think new ideas, they aren’t experts in cryptocurrency. If they were they would be the ones starting up the new businesses, not the ones forced to pretend that its old school and they know exactly how best to regulate it.

This stuff is new. People who risk their own money are risking THEIR OWN MONEY. They are they ones taking the risk, don’t expect tax payer funded FSA regulators to get it all right first time around.

Let’s be pragmatic. Early adopters may get burned. That’s part of the risk, and it’s a free choice.

0 ( +2 / -2 )

China, India, and S Korea will play catch up later, (Don't understand it so ban it) as the world becomes more aware of digital currencies, the digital industry is in its infancy. Email vs Writing a letter to mom, see how email wins that? Mobile devices have changed when, where, and how we transact with our finances, we no longer have to enter a brick and mortar establishment, someone in a field in AFRICA could just go online and boom do what they need and continue to work a few minutes later.

We already do the majority of or banking on line digitally, the value of digital currency will show its worth when the next Global Financial Crisis arrives, Gold and other precious Metals were once the hedge, I've the feeling that Digital currencies will be the hedge of choice. A cashless society is approaching but I've the feeling its not gonna be quite the way the ROTHCHILDS planned it!

0 ( +0 / -0 )

At least they admit it was about politics in the end, "consumers would be upset and it was politically difficult". Must have been some nice payoffs involved! I think consumers are a lot more upset now that their assets are frozen and they can now only take out their cash on a "first come first serve basis".

I do think that regulation should be from within, for example the group in charge of a crypto should determine rules which an exchange has to abide by in order to allow trading. For example, the NEM foundation kept warning Coincheck about their lax security measures and CC just ignored it (which is why NEM decided not to take a hard fork and invalidate the stolen coins, it was 100% preventable and was not a fault of the coin).

3 ( +3 / -0 )

Hmmm....  The notion of the JFSA "swinging in to action" is risible.  over 3 years and nothing.  Plus regulation will not prevent these bucket shop exchanges being hacked.

0 ( +0 / -0 )

Email vs Writing a letter to mom, see how email wins that? 

Email? Old school! Don't the kids just use FaceBook Snapchat and Instagram now?

Gold and other precious Metals were once the hedge

I don't think digital assets have surplanted them at all, yet. You can't even wear bitcoins. When the Indians and Chinese all dump their gold for cryptocurrencies, then I will believe that times have changed.

I've the feeling that Digital currencies will be the hedge of choice.

I think they can be useful in basket case economies like Venezuela or when central banks shutdown the system (like in Cyrpus a few years back), because even if the value fluctuates wildly, it is still doing better than the local currency. 

It's relative. 

Prefer bitcoins to Venezuelan bolivars? Yes. But To any of the major dollars? No, not right now thanks. But if the Japanese authorities shutdown the banking system here then sure, bitcoins would be nice to own then. Certainly easier to get bitcoins through customs than it is gold.

I do think that regulation should be from within, for example the group in charge of a crypto should determine rules which an exchange has to abide by in order to allow trading.

Definitely a role for self-regulation. And one for government regulation too. But I don't think anyone knows what the perfect set of rules looks like yet.

regulation will not prevent these bucket shop exchanges being hacked.

Certainly hackers will forever try to hack :)

I was impressed though that this NEM coin was designed in such a way that the stolen ones could be marked. You sure can't melt down cryptocurrency and re-mold it like could be done with precious metals.

1 ( +1 / -0 )

 Don't the kids just use FaceBook Snapchat and Instagram now?

Kids here rarely use FB, that's for Mom and Dad. Snapchat, Twitter, Instagram, and a few others are the preferred method of communicating.

0 ( +0 / -0 )

fxgai, good post - except owners of precious metals don't cart them around any more than you cart around your dollar holdings in wads of benjimans. Gold, due to its relative stable supply, is quite similar to Bitcoin (though it also has immensely valuable practical applications, whereas Bitcoin is fiat). Watching how virtual currencies evolve is fascinating, and anyone who states with certainty where all this is headed is lying or foolish. A true global cryptocurrency could be in its infancy. Perhaps what emerges will be regulated by "the machines," not human actions (not necessarily a bad thing, but potentially catostraphic - imagine an "I'm sorry, Dave" on either an individual or macroeconomic level). It is a lotta fun, though, and thanks for your post!

0 ( +0 / -0 )

anyone here buy any goods or services with cryptocurrency? Anybody here sell any goods or services for it?

What goods or services, and why would you?

0 ( +0 / -0 )

"Crypto" is Amway for people who don't want to push bad soap and stale snacks on their friends and relatives

0 ( +0 / -0 )

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