Japan To Regulate Bitcoin Exchanges - Essay Example

The officials of the Japanese government are considering whether to administer bitcoin exchanges on the wake of the new developments in the ongoing investigation of the Tokyo- based company, Mt. Gox.

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Mark Karpeles, the chief executive officer of Mt. Gox has been arrested by the Japanese police last Friday on suspicion of stealing $1 million from the online platform.

Mt. Gox has filed for bankruptcy, on February 2014, by stating that it has lost 750,000 of its customers’ bitcoins as well as 100,000 of its own, worth some $500 million at the time. Later on it was discovered that it was actually 200,000 bitcoins.

The finance Minister, Taro Aso explained that the government is considering to set up regulations on virtual currencies such as the introduction of a registration or license system for operators of virtual currency exchange markets.

On 2011, Mark Karpeles established Mt. Gox and has built it into the biggest exchange in the world.

According to the company documents and sources from the investigation, as of March 2013, the company has roughly $30.65 million worth of balance sheets which includes bitcoins and cash that has been gained as fees for brokering bitcoin transactions between clients.

A representative of the Financial Services Agency stated, “We are aware of some media reports writing about regulation systems to be applied to the trading of virtual currencies. However, no official decision has been made yet regarding the FSA’s stance in relation to bitcoins and other virtual currencies.”

The U.S Department of Homeland Security has seized the assets of Mt. Gox which is about $5 million that was kept in U.S. bank accounts around May 2013.

Mark Karpeles apologized in a press conference in February 2014 by stating, “First of all, I’m very sorry. The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact [of Mt. Gox’s collapse] is the most important point.”

WizSec which is a Tokyo- based security has been carrying out an unofficial investigation into Mt. Gox’s collapse which was conducted based on the information from various hacks, leaks and other sources.

WizSec stated that the team at the security has been able to gather a list if more than 2 million bitcoin address which is connected to Mt. Gox by comparing the leaked information that they have acquired with blockchain records and by conducting clustering analysis in address that was used at that time.