Japan is taking steps to discourage trading of privacy coins

15 May, 2018
by Joeri Cant
News
Japan is taking steps to discourage trading of privacy coins

The Japanese Financial Services Agency (FSA) is quietly taking steps to discourage trading of privacy coins such as Zcash, Monero and Dash, which the FSA claims to be "largely preferred by criminals who are out to launder money and engage in other criminal activities, including terrorism."

According to a report launched last September by Europols, coins, such as Zcash, Monero, and Dash, have gained popularity in the dark world, since it became obvious that Bitcoin can be tracked easily, by seasoned investigators. According to authorities in Japan, it is challenging, even impossible, to track people who receive these virtual currencies on any public ledger, including blockchain.

Sean Salloux, COO of Baanx Group Ltd, says: "governments have the right to restrict their use by citizens of their own countries."

However, Luis Manuel López, General Coordinator at Workchain Centers, has a different view on this.

He said: “The use of these cryptocurrencies to fund illegal activities is a challenge that Silk Road and Bitcoin had to face six years ago. However, the measures taken to address it should not be limited to tools of payment that criminals adopt because that isn’t the actual problem. We believe that even the fiduciary money that traditional banking promotes is also used to finance illegal activities.”

A similar sentiment comes from Dr. Jeffrey Lin, CEO of GCOX who says: “The suggestion by the FSA to pressure cryptocurrency exchanges in Japan to delist several privacy coins like Monero, Dash and Zcash may only partially solve the problem temporarily but not curb cybercrime like money laundering entirely. Those are mere placebos.”

“Governments should seriously consider having the central banks tokenize national fiat currencies instead. Critics of cryptocurrencies point to the lack of identifying information throughout digital transactions as a substantial obstacle to existing AML surveillance and enforcement capabilities, especially with ‘privacy coins’ like Monero, Dash and Zcash” Lin says.

Lin agrees to the need for regulatory standards, adding that, “All the essential regulatory and enforcement elements, identifying parties and information, a record of transactions, and even enforcement, can and do exist within the cryptocurrency system like Bitcoin. Creating a national currency token will ensure that the built-in features of cryptocurrencies, specifically their underlying blockchain technology will, in fact, improve, not harm AML efforts, even surpassing mechanisms already in place today. After all, the blockchain is an online public ledger, where each transaction is supervised, validated, and recorded as a complete transaction history. Something which cybercriminals would want to avoid.”

CEO and Co-Founder of INCLUSIVITY, Antonio Sainz said, “The authorities have to learn, invest and adapt to new technologies to avoid new forms of crime. A knife is not bad in itself, it is very useful in the kitchen, but it can also be used criminally as a murder weapon. Let’s not penalize technology, let’s fight against criminals and invest more in R&D to avoid new forms of crime.”

Perfect metaphor Mr Sainz!

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