Japanese financial regulator registers drop in virtual currency enquiries in Q2 2019

Japan’s Financial Services Agency (FSA) has earlier today posted the latest data about the operations of its Counseling Office for Financial Services Users, with the numbers revealing a drop in the volume of enquiries concerning virtual currencies, underlining a trend exhibited over the past several quarters.

The Counseling Office handled 494 enquiries about crypto assets in the quarter from April 1, 2019 to June 30, 2019. This is down from 574 enquiries in the quarter to end-March 2019. The decline highlights the subsiding of the hype around cryptocurrencies. This may also be seen to reflect the strict control the Japanese authorities exert over this market segment.

Let’s recall that, in June this year, the FSA announced an administrative action against FISCO Cryptocurrency Exchange. The action followed an onsite inspection conducted by the Japanese authorities at the offices of the Exchange in February this year.

The inspection revealed a set of law violations by the company concerning its business management. For instance, the Board of Directors did not discuss important management issues such as business plans. There were also problems with the risk management system for anti-money laundering and terrorism financing, and the external management system concerning outsourcing. The FSA has therefore issued a business improvement order to the company.

Back to the data provided by the FSA today, let’s note that the number of enquiries about investment products grew from 1,999 to 2,164 in the second quarter of the year. If sorted by product, 406 (18%) of the enquiries related to listed shares, 232 (10%) related to FX, and 152 (7%) related to investment trusts.

During the quarter, the Counseling Office received 89 reports about fraudulent investment offers.