Japanese regulations leave Koreans exposed
Regulations cannot stop fraud, just try to stay ahead of it. Conmen are kept busy as regulations become more specific and precise with the passage of time. Satoshi Nakamoto gave a new fraudulent item to conmen: bitcoin. There are many countries that have scam coins as specialty products. The so-called Kimchi coin from Korea is one of them. While scam coins from elsewhere rake in foreign currencies targeting foreigners, Korean scammers are highly focused on scamming Koreans. Their commonly used phrases are: “Coins invested by Japanese conglomerates;” “Coins loved in Japan;” “Official coins for the 2020 Tokyo Olympics.” Japanese regulations Based on regulations on fund settlements in Japan, people receive cash when money is deposited at exchange markets. Cash is the only currency permitted by the Japanese government that people can use to purchase bitcoin. So anyone who deposits the cash at exchange markets purchases bitcoin, without any alternative. After people purchase bitcoins, there occurs a problem. Selling and buying is not based on the price asked. When the price range of bitcoin is confirmed, the final price is determined based on that price with the addition of a commission fee and tax — similar to when people exchange currencies before traveling abroad. Based on the current price, the difference of the purchase and selling of bitcoin stands around five percent. Unless the margin is bigger than the figure, people can’t conduct high frequency trades. It’s not that they love long term investment, but aren’t able to make high frequency trades. Five months after revising the regulation on fund settlement, Japan adopted a registration system on cryptocurrency exchange markets. The registration is managed by the Financial Service Agency. This implies cryptocurrency transactions in Japan are treated just as seriously as any other financial transactions made through finance firms. BitFlyer was the first to register. The white list is the core factor in relations to registration. The list hasn’t been officially distributed. But for a cryptocurrency exchange market to formally register, only coins that don’t violate the rules on the list should be listed. Scamming Koreans Japan hasn’t banned initial coin offerings (ICO). But ICOs don’t mean coins are immediately listed to the country’s exchange market. It gets listed when the Financial Service Agency [tacitly] approves. That’s why scamming with cryptocurrency in Japan is difficult, so they turn to neighboring country Korea.