The situation in Japan

Samurai33

Member
Masternode Owner/Operator
Mar 21, 2017
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www.dashjapan.com
Dear Dash Community Members,

I am a masternode owner residing in Japan, and I have been investing in Dash since March of last year.

I'm writing because I wanted you to know that Dash is facing a difficult situation in Japan. Because I'm not great with English, I have had this text translated.

On April 1 last year, new Virtual Currency Regulation came into effect in Japan. On September 29, 11 cryptocurrency exchanges registered with the Financial Services Agency (FSA). 5 more services have registered since then, bringing the total to 16.
http://www.fsa.go.jp/menkyo/menkyoj/kasoutuka.pdf

https://bitpress.jp/news/information/entry-6488.html

The list of every cryptocurrencies handled by these 16 services is colloquially known as the "Whitelist" among investors, because it lists every cryptocurrencies recognized by the FSA. There are currently 19 currencies on the "Whitelist".

BTC, BCH, ETH, LTC, MONA, XRP, ETC, XEM, XCP, FSCC, CICC, NCXC, ZAIF, BCY, SJCX, PEPECASH, ZEN, CMS, QASH
http://coinpost.jp/?p=6660

The only cryptocurrency exchanges in Japan which handle Dash are Coincheck and Kraken. They also handle Monero and Zcash. Right now, they are continuing their operations while awaiting registration.

With the NEM hack involving Coincheck, there has been a lot of discussion wondering why Coincheck isn't registered with the FSA yet, and more and more people are speculating that it's because they handle cryptocurrency with a high degree of anonymity. The Nikkei and Asahi Shimbun newspapers both published articles which reached that conclusion.

(I personally think that is not the only reason, and that they also had issues with separately managing client assets and reporting on suspected money laundering transactions.)

Even if Dash is not included on the "Whitelist", Japanese investors can still trade in Dash using foreign exchanges like Binance and Poloniex, and it's perfectly legal for merchants to accept Dash in transactions. However, because it's difficult to exchange cryptocurrencies not on the "Whitelist" for Japanese yen, I doubt many merchants will accept it. In addition, although the FSA has said that the "Whitelist" is not an endorsement from the government, many investors will view it that way.

As you know, the Japanese news agency Jiji Press reported on March 17th that Coincheck was moving in the direction of ceasing dealings with Dash, Monero, and Zcash.
https://cointelegraph.com/news/hack...-anonymity-focused-coins-after-fsa-inspection
https://cointelegraph.com/news/hack...-anonymity-focused-coins-after-fsa-inspection
There has yet to be an official announcement at this time, but it appears that Coincheck judged these coins to be at a high risk of being abused for money laundering purposes.

It has also been reported that Coincheck plans to purchase these three types of coins which they are holding for their customers at a set rate and only perform payment after a rigorous identity verification process.

It is still unclear as to whether this decision was made by Coincheck, who has currently fallen out of favor in Japanese society, in order to appease the Financial Services Agency or if it was made under the direction of the Agency.

I sincerely hope that Kraken, who deals in Dash, Monero, and Zcash as well, will not follow in the footsteps of the moves Coincheck is making recently.

Although there is quite a bit of speculation fever surrounding cryptocurrency in Japan, many investors and news agencies, as well as the controlling authority here, the Financial Services Agency, have yet to gain a sufficient understanding of these currencies. Misleading reports stating that "anonymous cryptocurrencies" simply exist for the purpose of doing bad things continue to spread without a sufficient understanding of the importance of the privacy and fungibility of cryptocurrencies. What's more, Dash is always lumped together with Monero and Zcash who haven't fully released their blockchains.

I wrote that it is absurd that Bitcoin is listed on the "Whitelist" while Dash is not.
https://www.dashjapan.com/dash-whitelist/

That is all I have to report on the current situation in Japan.

Regards,
Samurai33
 

sasababy

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Feb 21, 2017
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こんにちは、あなたは日本に多くの地元のスプリントを持っていますか? 誰もが協力して、レギュレータがどのようにダッシュを理解するかを変更することができます。
 

Samurai33

Member
Masternode Owner/Operator
Mar 21, 2017
53
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Japan
www.dashjapan.com
Thank you for replying in Japanese. Please use English.

Many people have bought Dash at Coincheck. However, there are still few people in the Dash community in Japan.

There are only a few people I can contact directly.
 

jimbursch

Well-known Member
Mar 5, 2017
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Thank you for bringing this to our attention! Please keep us posted on developments in Japan.

The Dash community has people who act as sort of ambassadors in their home country, and we like to support them with funds from the budget. Perhaps you can play such a role for Japan, or help us find somebody who can.
 

Samurai33

Member
Masternode Owner/Operator
Mar 21, 2017
53
44
58
Japan
www.dashjapan.com
Thank you for bringing this to our attention! Please keep us posted on developments in Japan.

The Dash community has people who act as sort of ambassadors in their home country, and we like to support them with funds from the budget. Perhaps you can play such a role for Japan, or help us find somebody who can.
Thank you. I am considering submitting a budget proposal from Japan.
 
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Samurai33

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Mar 21, 2017
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www.dashjapan.com
There are no laws in Japan which regulate only highly anonymous cryptocurrencies.

The lawyer Satoshi Mihira made the following Tweet.

"Legally, a "notification" is all that is needed to add a virtual currency to the list of "traded currencies." The Financial Services Agency does perform an inspection to determine whether or not the currency fits the definition of a "virtual currency," but they cannot make judgments as to whether or not it is valid to list on the public market."

https://twitter.com/satoshimihira/status/973544241275154432


In other words, the Financial Services Agency (FSA) has no authority to prohibit the use of Dash.

The FSA can, however, refuse to allow the registration of an exchange which deals in highly anonymous cryptocurrencies.

The FSA does not allow the registration of Coincheck because they have determined that the company's monitoring and reporting readiness as they pertain to money laundering are insufficient. Coincheck's position has become even weaker due to the NEM hack incident.

Meanwhile, there have also been several other media reports which made Dash look bad.

Professor Masashi Nakajima from Reitaku University (a former staff member for the Bank of Japan) spread the false information that "Dash was created for doing bad things" on an internet news program.

https://abematimes.com/posts/3668503


There was also a news report which suggested that criminals might be planning to launder money using Dash.

http://www.itmedia.co.jp/news/articles/1802/07/news086.html


(In reality, the criminal behind the NEM hack used Bitcoin and Litecoin to perform money laundering.)

What is needed right now is support for companies like Coincheck and Kraken to accurately explain Dash to the FSA, a clearing up of the misconceptions held by the FSA, and, furthermore, efforts to make the privacy and fungibility of cryptocurrencies known to the general public in Japan and clear up any misconceptions they may have.

I would explain this in the following way.

"The Financial Services Agency touts the protection of the user. Not recognizing the privacy of cryptocurrencies goes against user protection. Furthermore, because Bitcoin has low anonymity and fungibility, those who wish for anonymity resort to over-the-counter (OTC) trading without using an exchange. OTC trading prices are higher than regular market prices, making this form of trading appeal to sellers as well. This sort of environment quickly becomes a hotbed of money laundering and tax evasion. What's more, the FSA claims to be working towards the cultivation of the virtual currency market, but the exclusion of privacy coins will almost undoubtedly place pressure on the development of many coins."
 

TaoOfSatoshi

Grizzled Member
Jul 15, 2014
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There are no laws in Japan which regulate only highly anonymous cryptocurrencies.

The lawyer Satoshi Mihira made the following Tweet.

"Legally, a "notification" is all that is needed to add a virtual currency to the list of "traded currencies." The Financial Services Agency does perform an inspection to determine whether or not the currency fits the definition of a "virtual currency," but they cannot make judgments as to whether or not it is valid to list on the public market."

https://twitter.com/satoshimihira/status/973544241275154432


In other words, the Financial Services Agency (FSA) has no authority to prohibit the use of Dash.

The FSA can, however, refuse to allow the registration of an exchange which deals in highly anonymous cryptocurrencies.

The FSA does not allow the registration of Coincheck because they have determined that the company's monitoring and reporting readiness as they pertain to money laundering are insufficient. Coincheck's position has become even weaker due to the NEM hack incident.

Meanwhile, there have also been several other media reports which made Dash look bad.

Professor Masashi Nakajima from Reitaku University (a former staff member for the Bank of Japan) spread the false information that "Dash was created for doing bad things" on an internet news program.

https://abematimes.com/posts/3668503


There was also a news report which suggested that criminals might be planning to launder money using Dash.

http://www.itmedia.co.jp/news/articles/1802/07/news086.html


(In reality, the criminal behind the NEM hack used Bitcoin and Litecoin to perform money laundering.)

What is needed right now is support for companies like Coincheck and Kraken to accurately explain Dash to the FSA, a clearing up of the misconceptions held by the FSA, and, furthermore, efforts to make the privacy and fungibility of cryptocurrencies known to the general public in Japan and clear up any misconceptions they may have.

I would explain this in the following way.

"The Financial Services Agency touts the protection of the user. Not recognizing the privacy of cryptocurrencies goes against user protection. Furthermore, because Bitcoin has low anonymity and fungibility, those who wish for anonymity resort to over-the-counter (OTC) trading without using an exchange. OTC trading prices are higher than regular market prices, making this form of trading appeal to sellers as well. This sort of environment quickly becomes a hotbed of money laundering and tax evasion. What's more, the FSA claims to be working towards the cultivation of the virtual currency market, but the exclusion of privacy coins will almost undoubtedly place pressure on the development of many coins."
What do you suggest our approach should be there? Do you have contact information to individuals of power in the FSA? How can we begin to clear up the confusion about Dash?
 
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Samurai33

Member
Masternode Owner/Operator
Mar 21, 2017
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www.dashjapan.com
I do not have contact information. Basically only exchanges can talk with personnel in charge of the Financial Services Agency. We can send the document to the person in charge of the Financial Services Agency.

I sent an opinion paper in November of last year, but I will send it again.
 

ewok

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Oct 4, 2016
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I think this is a good issue to get on the front foot with especially providing education to the regulator- (I operate under a similar licensed regime in another jurisdiction).

Education is the key here.

The key to dialogue is finding a law firm who has a strong relationship to the FSA- firstly finding out is there an FSA issue? then teach them why fungibility matters and how this feature is not about money laundering, rather it is a tool of commerce.

I think this could form a proposal but it must be carried out in a precise measured manner. Confidence would be needed initially between the person dealing with law firm and FSA as it could not play out in public in real time.
 

Ezio Rojas

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Feb 7, 2018
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I have read your article and I see that you have done a very good job to explain the whole situation within what is happening in Japan.
Personally and as a legal professional, I have followed closely the Japanese case and as in this jurisdiction have managed to normalize the use of cryptocurrencies.
My question is, as a community can we help you with the investigation and respective report?
I think that if it is possible to perform some kind of procedure for Dash to "normalize" within Japan, it should be tried.
The Japanese market is particularly large and if we can make consumers more confident in Dash, we can ensure an important adoption in the Japanese market.
 

yocko

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Feb 7, 2017
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XqWRVQSoUyrMQ7TDHqz5zcFd1xxdQEDR3D
I think @Bradley Zastrow needs to be making contact with regulators on this. Our partnership with blockcypher will also play an integral role here.
We need to be standing by privacy on our blockchain, however, adapting whitelisted KYC DASH address for transactions going to exchanges.
We should all have the right to transact without our entire worth/bank balance being made public to the world, but when going to an exchange/bank, this money needs to be Identifiable as to who it is coming from.
In this way, it doesn't matter if the coins have been mixed and transactions cannot be followed because it has a person responsible for explaining how he or she came into those funds as with any business.

I think we need to be starting a partition or some way of volumes of people expressing their want for this financial privacy.
We are seeing infighting starting in the community already over this issue with some saying remove the privacy for now and others saying keep it and fight on, how about rather than fighting each other like this we voice the importance of financial privacy loudly to the world.
How about we work on integrations that keep on chain privacy but give Identification for the in and out points. DASH core could even work on a KYC whitelisted address for wallets linked to the Evolution DAPI, I am sure that is a compromise all parties could come to agree on?
 

solarguy

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Mar 15, 2017
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Core is aware of the issue and is working with somebody in Japan. Sounds like you (OP) could contribute a lot to that conversation. Talk to Tungfa.

Here's a quote from DashPay.



tungfaDash PR11 points 5 days ago

yep we are , have a direct contact in Japan ,Alexy + Raico were over there recently to get a better picture for us, getting lawyer soon and are on it.
 
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Antti Kaikkonen

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I don't see this as a major issue. Japanese people can always use shapeshift to convert between Dash and the approved cryptocurrencies.

Do we have a POS system that can automatically exchange Dash to a BTC address? I bet there are some services that can automatically convert bitcoins received to an address to Japanese Yen. So by using both (Dash -> BTC) and (BTC -> Yen) we would have( Dash -> Yen).
 
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GrandMasterDash

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Jul 12, 2015
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This is not really an issue for dash to fix. It just happens to be that dash is one of the early cryptos to be banned, but they will be consumed by their own madness. It is very easy to use a decentralized exchange like CryptoBridge to convert mixed dash to bitcoin and then send it to said Japanese exchange. It's easy to mix any crypto and send this way.
 

Samurai33

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Mar 21, 2017
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Japan
www.dashjapan.com
Japanese investors can send BTC to foreign exchanges and buy and sell DASH.

JFSA does not prohibit Dash. JFSA will not approve that legally registered exchanges will list privacy coins. However, this will make it difficult for criminal investigation and tax investigation, so there is no merit for Japan.

Experts speaking opinions to JFSA and Japanese press organizations do not accurately understand Dash. It is necessary to disseminate information to understand.
 
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Samurai33

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Japan’s Self-Regulatory Crypto Exchange Body to Release Voluntary Rules, Report Says
https://cointelegraph.com/news/japan-s-self-regulatory-crypto-exchange-body-to-release-voluntary-rules-report-says

In Japan, Dash is equated with coins running a hidden blockchain like Monero or Zcash. They are called by the term "anonymous currencies". The Nikkei newspaper reported that currencies such as Monero, Dash, Zcash etc. which have been regarded as a problem from the height of anonymity are likely to disappear from the front stage.
https://www.nikkei.com/article/DGXMZO31900130Y8A610C1EE9000/ (Members Only)

Dash is running a public blockchain and so we are as transparent as needed and possible. It is very important to notify this to Japan's 16 licensed crypto exchanges and FSA.
 
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Samurai33

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Mar 21, 2017
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www.dashjapan.com
Cryptocurrency and Blockchain Ecosystem in Japan 2018
https://medium.com/hashhub/cryptocurrency-and-blockchain-ecosystem-in-japan-2018-127532d62f6
“ 5. Cryptocurrencies or tokens that are allowed to be officially traded and sold to the public in Japan are limited (so-called whitelist systems) and the list of those coins is maintained and updated by the industry association appointed by FSA.

6. Notable coins to be excluded by the list are privacy coins such as Zcash, Monero, and Dash. ”​
 
T

toknormal

Guest
Just tell them that if they're worried about money laundering they'd better just ban them ALL because they're ALL anonymous. Ban any branches of the BSI while they're at it...and Deutsche Bank Japan and monetary gold, silver, stocks of salt, wheat, bearer bonds and jewellery.

That should about do it ;)
 

solarguy

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Mar 15, 2017
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Their response is either irrational and foolish, or they are making some concessions to keep the legislators and bankers "happy".
 

AgnewPickens

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Mar 11, 2017
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Bank of Japan has been in trouble for a while, crypto creates a risk of capital flight, China put in "bans" over similar concerns and it didn't do much, see how long the BoJ holds out on this, at some point they may need capital support coming in from crypto. Cat & mouse game with the legacy systems around the world.
 
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camosoul

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Sep 19, 2014
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The Financial Services Agency touts the protection of the user. Not recognizing the privacy of cryptocurrencies goes against user protection. Furthermore, because Bitcoin has low anonymity and fungibility, those who wish for anonymity resort to over-the-counter (OTC) trading without using an exchange. OTC trading prices are higher than regular market prices, making this form of trading appeal to sellers as well. This sort of environment quickly becomes a hotbed of money laundering and tax evasion. What's more, the FSA claims to be working towards the cultivation of the virtual currency market, but the exclusion of privacy coins will almost undoubtedly place pressure on the development of many coins."
This may be the best series of words ever to appear on the DASH forums.

Send this to every government entity forever...

Not that it will necessarily change their minds. They know that they're creating OTC money laundering problems with their actions. Which they hope to then use as an excuse for even more onerous regulations.

They need to know that we're watching and know what they're up to, and make it publicly known.