Japan’s FSA reports further decline in number of enquiries about virtual currencies

The hype around virtual currencies appears to be subsiding, as indicated by the latest data provided by Japan’s Financial Services Agency (FSA).

The FSA Counseling Office for Financial Services Users handled 1,231 enquiries concerning virtual currencies in the quarter to end-September 2018. This compares with 1,602 such enquiries received in the preceding quarter. Let’s note that the Counseling Office registered 3,559 enquiries about virtual currencies in the first three months of 2018. That is, investors are asking about cryptos more rarely and this trend has become more visible over the past two quarters.

The FSA did not elaborate on the reasons for the decline in such enquiries. Let’s note, however, that the Japanese authorities have continued to tighten their control over virtual currency exchange providers. In September, for instance, the Ministry of Finance issued a business improvement order to Tech Bureau Inc, operator of cryptocurrency exchange Zaif.

This happened about a week after Tech Bureau confirmed that about JPY 6.7 billion in virtual currency had been stolen. The virtual currency was reported to have been stolen from “hot wallets” that lack solid security. The hack, which happened between 5 p.m. and 7 p.m. on September 14, 2018, affected three types of cryptocurrency – Bitcoin, Bitcoin Cash and Monacoin.

Back to the FSA data for the quarter to September 30, 2018, let’s mention that the number of enquiries about investment products also fell – from 2,231 in the quarter to end-June, to 2,016 cases in the quarter to end-September.

Across products, 343 cases (17% of the total) concerned listed stocks, 174 cases (8% of the total) concerned FX, and 169 cases (8% of the total) concerned investment trusts.

There were 167 reports of fraudulent investment solicitation, 99 of which involved damage.