Japan- largest Bitcoin market in the world in terms of trade volumes but has loose regulations for the business and investors according to Koji Higashi, the co-founder of IndieSquare and Japanese cryptocurrency researcher.
He also says there is loose customer protection by government, which has given much freedom to cryptocurrency exchanges.
Japan has a legal payment method and other cryprocurrencies are also getting similar treatment too. However, he says other smaller cryptocurrencies or altcoins are categorizing or given same treatment like Bitcoin.
“Here’s an example to give you an idea of how loose the definition of official cryptocurrencies. Pepecash receives the same categorization as Bitcoin as a ‘first class’ cryptocurrency, one that can be legally trading and sold on licensed exchanges”.
This could lead investors to believe that smaller altcoins are major according to him. It is clear to see the point on that stricter regulations could shield customers from shoddy investments, but on the other hand, many would say that this freedom given to cryptocurrency exchanges is good for thriving of cryptocurrencies and the giving users the alternatives.
It leaves enough space for investors to make sound judgement on which project is worth their time. That could mean many could even like Bitcoin in the future after weighing options, if Bitcoin proves its worthiness.
Again, being the largest Bitcoin market in the world might probably have come due to Japan’s practical regulations for cryptocurrencies, which favor their development. Therefore, it is not necessarily a bad thing to give cryptocurrency exchanges freedom.
Imposing stricter rules on cryptocurrencies could slow down exponential rate of the entire cryptocurrency market, even if Bitcoin was not unregulate. So the regulations actually favor Bitcoin too.
However, lack of regulation at all means cryptocurrencies might have huge volatile. If crypto markets do not come up with ways to solve the volatility.
Actually, Japan regulation does state that “no purpose coins” — or those that do not promise any return. The functionalities per the terms of sale, selling tokens to the public — cannot be classified as virtual currencies. It seems what could be lacking is good implementation as writes Higashi.
“It seems to me that there is sort of a legal blind spot for ICOs between equity offering and donation crowdfunding. ICO projects seem to be benefiting from this immensely right now. Even without any promises, many of them are, literally, raising millions of dollars from their token offerings.”
In United States where Know Your Customer (KYC) and Anti-Money Laundering (AML) policies have been emphasizing. Thus, some businesses have had to shut down.