#IntlRoundup: Japan’s Crypto Breaches Cost Millions; Australian Regulators Focus on Crypto Fraud
The global nature of digital currencies makes following international news beneficial for investors and interested market participants. However, due to how fast news travels through the landscape, it can be easy to miss the occasional story now and again.
As part of a regular weekly roundup, Coinsquare News compiled the week’s significant international news headlines. This week, we look at the financial impact of Japan’s string of cryptocurrency breaches, Australian regulators taking preventative action, and more.
Financial toll of crypto breaches in Japan worth around $694 million CAD
This week, a report from a national publication in Japan, the Asahi Shimbun, illustrated the financial impact of cryptocurrency breaches in the country this year.
The publication sourced data from Japan’s National Police Agency (NPA) concerning cryptocurrency breaches that occurred in the first six months of 2018. Notably, it found that the number of reported crypto thefts in Japan during this period was 158, which is triple the number of incidents that occured in the first six months of 2017.
So far this year, the country’s most notorious breach was the one that affected Coincheck in January. The breach, which targeted one of the largest digital currency exchanges in Japan, reportedly stole over 500 million units of the cryptocurrency NEM. The currency was valued at around $1 USD per token at the time of the breach, valuing the total loss at over $600 million CAD according to conversion rates at the time.
The NPA reported that, in total, the equivalent of 60.503 billion yen (over $694 million CAD) worth of digital assets was stolen in Japan in the first half of 2018. This figure is a combination of assets stolen from both cryptocurrency exchanges and directly from the individual cryptocurrency accounts of users.
The report also stated that in more than 60 percent of cases involving individual account breaches, the affected parties used the same login credentials for their cryptocurrency accounts as other internet services.
If there is a silver lining to the story, it’s that the NPA claims that the Coincheck theft triggered increased consumer awareness. This, it claims, is shown by the number of reported incidents decreasing since the peak in January, with 76% of the year’s breaches having occurred between January and March.
Australian financial regulator taking action against fraudulent crypto businesses
Last week, the Australian Securities and Investments Commission (ASIC) made headlines when it outlined part of its cryptocurrency initiatives for the 2018-2019 financial year. Now, the Australian financial service regulator is in the news again for taking action against a series of cryptocurrency businesses alleged to be operating outside of the confines of the law.
The report, which arrives courtesy of the Australian Broadcasting Corporation, says that ASIC confirmed it shut down a series of Initial Coin Offerings (ICOs) operating illegally in Australia.
While ASIC is not taking action against all ICOs, it is taking action against those that do not hold Australian financial services licenses, operate illegal unregistered managed investment schemes, and/or involve misleading or deceptive statements.
In five other instances that occured since April 2018, ASIC claims it prevented ICOs from launching without the necessary investor protections. The regulator claims its current action was to prevent illegal or misleading statements from reaching the market.
“If you raise money from the public, you have important legal obligations. It is the legal substance of your offer — not what it is called —that matters,” said ASIC commissioner John Price.
Head regulator in UAE capital wants increased international regulation
In news out of the United Arab Emirates, a local news outlet reported that one of the country’s head financial regulators is calling for an increased effort to regulate the cryptocurrency industry.
Richard Teng, who is the head of the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market, called for international regulation in the fight against malicious actors operating in the cryptocurrency space.
“This space needs to be properly regulated, otherwise there is the risk of financial crime,” he said, during an interview at Fintech Abu Dhabi 2018.
Teng further added that “confidence” in cryptocurrencies as an asset class is negatively affected each time a cryptocurrency breach occurs. As a result, he feels that tougher regulation and a combined international effort is needed to better handle the industry moving forward.
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