Japan has arguably become the cryptocurrency capital of the world. While its countrywide Bitcoin adoption has been nothing short of amazing, it has resulted in the creation of a crime undercurrent. Showing the world that it is taking these matters seriously, the introduction of a new licensing system has gone a long way in cleaning up the crypto exchange landscape in the country. Furthering that, the Japanese Metropolitan Police Department has also announced that it has opened a brand new “Cyber” building, made up of 500 agents. The “Cyber” building will have a six-department split, with cooperation between different police authorities expected to improve as a result.
The hack of the century
Coincheck – one of Japan’s leading cryptocurrency exchanges – fell victim to a $532 million hack not too long ago. Representing the biggest cryptocurrency theft to date, it sent shockwaves throughout Japan. This incident also alerted many to Japan’s National Police Agency statistics on crypto crime, which revealed that across 2017 more than $6.2 million in cryptocurrency was stolen or defrauded. With these figures and incidents becoming a national concern, Japan’s police were left with little choice but to step up and enforce a heavy crackdown on criminal activity.
Choincheck’s historic hack raised alarms bells, as many had concerns about how and why it was able to happen. In a surprising twist, NEM was the currency targeted during the breach, as such a percentage the stolen funds were tracked by the NEM Foundation. This data was then handed over to the police. From there, they were able to identify and question an individual in Tokyo in possession of stolen Coincheck cash. Sadly, by March approximately 40% of the funds had apparently been laundered, with stolen NEM appearing on various Canadian and Japanese exchanges.
Stepping up security measures
Japanese police faced almost 70,000 cybercrime reports last year, which opened the floodgates to a wealth of investigations. 200,000 fake shopping sites have also been uncovered by recent public surveys, as it’s evident that through cryptocurrency transactions Japanese citizens are being caught out. The level of cybercrime is on the rise in Japan, so much so that many companies are now starting to take the threat more seriously. Over the past 12 months, the average Japanese firm has spent more than $10 million on cybercrime prevention measures according to a recent IBM report. Japan is fast-becoming Bitcoin’s most exciting market, with the business sector now appearing to wake up to its potential and the related security flaws that come with it.
Coincheck’s record-breaking breach and the much-discussed fall of Japan-based Mt. Gox haven’t deterred the Japanese public from investing in Bitcoin. According to recent reports, approximately half of the world’s Bitcoin trading activity occurs in yen, with this number set to grow as Japan continues to stand behind the cryptocurrency revolution.
The crackdown continues
Bitcoin – along with various altcoins – will change the world. Japan has seen the potential in the cryptocurrency market, but it has had a tough time quashing related criminal activity. With Japan’s Financial Services Authority enforcing a new licensing system, along with new policing measures, Japan could soon bring growing crypto crime activity under control.