Japan plans to introduce digital currency operation supervision bill

     The Japan Times published an editorial last Monday saying that Japanese Finance Minister Taro Aso said the government will strengthen supervision of digital currencies, and the new regulations may involve the registration and licensing system for digital currency traders.

The article also stated that the Ministry of Finance, Financial Services Agency and National Policy Bureau of Japan were specifically asked to cooperate with other relevant authorities to improve the Anti-Money Laundering Act and the Financial Products and Exchange Act. The purpose is to submit the relevant bills in the regular parliament next year.

The government’s move follows the arrest earlier this month of Mark Karpeles, who ran the now-defunct Tokyo-based bitcoin exchange Mt. Gox. Karpeles was charged with fraud, including falsifying company data to inflate the company’s assets. He also faces new charges of embezzlement.

The Japan Times editorial stated that the collapse of Mt.Gox and the criminal investigation into related transactions at the beginning of the year fully demonstrated that the government must introduce relevant measures to ensure the security and transparency of transactions, thereby protecting the rights and interests of digital currency users. Currently, Japan does not have any legal restrictions on digital currencies. The editorial also mentioned a cabinet resolution in March 2014, in which the Japanese government stated that Bitcoin, like precious metals, is a non-monetary market product and is therefore not subject to financial laws.

Earlier this month, a man appealed to the bankrupt Mt. Gox to pay for his bitcoin losses, but a Japanese court rejected the man's appeal on the grounds that citizens do not have the right to hold digital currencies. The Tokyo District Court stated that bitcoin "is not the subject of ownership" and therefore rejected the man's lawsuit for compensation.

However, people have not completely lost their trust in digital currencies. For example, just this month, Japan-based Bitcoin trader bitFlyer Inc. announced that it had received $4 million in venture capital in its latest round of venture financing.