News Regulation

Japan’s FSA wants crypto exchanges to de-list anonymous altcoins

Japan’s Financial Services Agency (FSA) wants local cryptocurrency exchanges to de-list privacy-centric altcoins such as Dash, Monero and Zcash.

According to the report of Tokyo-based journalist Jake Adelstein, sources close to the FSA say the regulatory agency is “taking all available steps” to pressure domestic trading platforms to drop support for altcoins that tout the ability for users to make anonymous transactions.

The FSA says that these cryptocurrencies, which are generally much more difficult to track than Bitcoin, have become too closely linked with the criminal underworld.

For example, Monero is increasingly associated with “cryptojacking” attacks, where hackers infect computers with malware that hijack CPUs and use them to mine cryptocurrency. A member of an FSA-sponsored cryptocurrency working group said in a meeting on April 10:

«It should be seriously discussed as to whether any registered cryptocurrency exchange should be allowed to use such currencies».

There is no official prohibition on trading or facilitating the trading of anonymous cryptocurrencies at the moment. Nevertheless, the FSA’s war on privacy-centric altcoins appears to be having some success.

Coincheck, which was hacked in January and was later acquired by Japanese brokerage Monex, quietly de-listed Monero and two lesser-known altcoins that claim to be anonymous.

Japan’s licensed cryptocurrency exchanges recently created a self-regulatory body that will have enforcement power over its members. The organization may curate a whitelist of cryptocurrencies that exchanges are allowed to list, which would provide the FSA with an easy avenue to pressure exchanges to de-list cryptoassets of which it does not approve without having to codify the prohibition into official policy.