Buried within a report from Bloomberg this week was an interesting statement from Japan.
Speaking with the relatively new Commissioner of the Japanese Financial Services Agency, Toshihide Endo, the public official shared his thoughts on cryptocurrency and Japan.
Japan became a haven of sorts for cryptocurrency exchanges after China put the kibosh on these largely unregulated trading platforms. Japan took a different approach by regulation these exchanges. The results have been a mixed bag so far as several enormous hacks have marred the sector in the land of the rising sun.
Endo said the FSA was attempting to balance the benefits of innovation and investor protection.
Endo, a Wharton grad, has been at the FSA for quite some time – since 1982. He has been responsible for supervising major banks and insurance companies and has worked in various supervisory roles that have exposed him to capital markets fraud and more. So he has checked all of the boxes.
A recent report by the FSA said that onsite inspections of 16 licensed cryptocurrency exchanges, and 7 with licenses pending in Japan, uncovered loose business practices and controls.
The report quotes Endo saying;
“We have no intention to curb (the cryptocurrency industry) excessively. We would like to see it grow under appropriate regulation.”
The “appropriate” part is key. Too much regulation and you halt innovation in its tracks. Too little and the regulator ends up being blamed for any ensuing chaos.