Major U.S. cryptocurrency exchange Coinbase said Japan’s tighter scrutiny of the industry will give it an advantage, signaling the company’s confidence in securing regulatory approval to enter a market rocked by hacking scandals.
Japan has been considered a cryptocurrency haven for its large pool of retail investors and light-touch government policies, but regulatory oversight has increased in recent months amid a series of high-profile thefts. Coinbase’s bid for approval to operate as cryptocurrency exchange here is being closely watched as a gauge of the country’s openness to new players.
Talks on obtaining a license are “going well” with the Japan’s Financial Services Authority, Mike Lempres, chief policy officer at Coinbase, told the Nikkei Asian Review in a recent interview in Tokyo. “We are… committed to getting it done. It will certainly be in 2019.”
Founded in 2012, Coinbase is one of the largest cryptocurrency exchanges in the U.S., with 20 million accounts and reportedly $1 billion in revenue last year. In June, the company announced it would enter Japan and appointed a managing director.
Coinbase is touting its investor safeguards. Lempres said that out of its 550 employees, “dozens” are dedicated to security. He said 99% of funds are stored offline, with only 1% held in “hot wallets” — accounts that are connected to the internet for convenience but can be vulnerable to hacking. That 1% is fully insured, he said.