A senior executive at Coinbase has stated that he has confidence the firm will be receiving an operating license from Japan in 2019. This statement comes at a time when the regulating bodies in Japan are boosting up scrutiny and oversight of Crypto exchanges in the country.
Coinbase Expectant Of A License In 2019
Mike Lempres who is the chief policy officer of the US-based Crypto exchange has been quoted by the Nikkei Asian Review as stating that the strides that Coinbase as a firm is making towards obtaining a license from the FSA (Financial Services Agency) seem to be bearing fruit. He went on to add that the firm is committed to making this happen, forecasting that it may be happening in the coming year.
Coinbase officially made the announcement that it intended to expand its operations to the Japanese market three years ago, in 2016. Upon launching its Japan operations, Coinbase appointed Nao Kitazawa, a former employee of Morgan Stanley Japan, as the head of its Japan office mid this year.
As had been previously reported, Mike Lempres who was previously the crypto exchange’s chief legal officer moved on from this role and was appointed to focus on government affairs for Coinbase.
Hack Attack Virtually Impossible
Mike Lempres intimated that at the moment what was of utmost importance for the Financial Services Agency, which is the regulating body for the financial market in Japan, was security. This has been seen to be mainly due to the hack attacks that have befallen the two major crypto exchanges in the country this year. The two crypto exchanges, Coincheck and Zaif were hacked at the beginning of the year and last month respectively.
Even though the Financial Services Agency has reportedly been reviewing more than a dozen applications made this year seeking licenses, it is yet to issue anyone applicant with a license. Even in the face of this, it has been reported that more than a hundred and sixty companies, which include public firms, are in line to tendering in applications for exchange licenses.
This notwithstanding, Coinbase is confident that the tough stand that the Financial Services Agency is taking when it comes to crypto exchanges may just work in its favor. The argument for this is that with the exchange having ninety-nine percent of its funds in cold wallets, i.e. offline and without any internet connection, it stood a very slim chance of being targeted in a hack attack.
Duplication Of US System Impossible
Lempres added that though the focus on security was a plus for Coinbase, the main issue will arise in the event that the Financial Services Agency would require the Crypto exchange to duplicate the system it has in the US in Japan. He stated that though this would enable the FSA to better monitor the transactions, it would also make the exchange more vulnerable to a hack attack.
Coinbase has a complex number of security features built for the protection of its storage within the US, which could pose a challenge to duplicate in other jurisdictions.