The Japanese Financial Services Agency (FSA) has released the latest data from the Financial Services User Advisory Service. The regulator found that inquiries about cryptocurrencies had dropped dramatically in the second quarter of 2019.
New trends emerge
Between April and June 2019, the advice center received fewer inquiries about virtual currencies. In the last quarter only 494 inquiries were made, compared to 574 in the first quarter of the year. The data suggests a continuing trend towards fewer crypto inquiries, which may reflect the positive effects of Japanese control over their crypto markets. It also suggests that the digital currency hype is fast dying.
The FSA has actively supervised all cryptocurrency exchanges in the country, taken administrative measures and issued improvement orders. In June, it proposed similar action against FISCO, a cryptocurrency exchange that followed an investigation into the company’s offices in February. The regulator found that the company was violating Japanese laws regarding the management of business activities.
It turned out that FISCO’s board of directors did not even discuss important management issues such as a business plan. In addition, the exchange had lame risk management systems. Its measures to finance terrorism and to combat money laundering were found to be inadequate. Outsourcing and other external management systems were also inadequately designed. Because of these issues, regulators proposed a business improvement order to the company that could help it operate according to industry standards.
Japan’s crypto love
Japan is one of the few large economies in the world with a very supportive attitude towards digital currencies. In addition to accepting Bitcoin as legal tender, the country also has several regulated crypto exchanges. Now the FSA is trying to tighten its control over these crypto entities and benchmark it closer to traditional financial services companies. The constant inspections and business improvement missions testify to the seriousness of the regulator.
It’s important to note that investment product inquiries rose to 2,194 in the second quarter. In the first quarter it was 1,999. Approximately 18% of that number related to publicly traded stocks, while 10% related to currency investment products. Another 7% was for mutual funds. Around 89 reports received by the advice center related to fraudulent investments.
The growing number of investment inquiries and diminishing crypto issues could indicate that the digital currency market is finally getting more mature, at least in Japan.