Japan’s FSA reports a sharp decline in the number of inquiries related to cryptocurrencies

On February 8, the Financial Services Agency (FSA) issued a report entitled: “Status of Inquiries and Other Communications Received by Counseling Office for Financial Service Users.” The report shows the number and details of inquiries and other communications received by the Counseling Office for Financial Service Users in the fourth quarter (October 1–December 31, 2018).

According to the report, the Office received 9,431 inquiries in the fourth quarter, which is largely unchanged (+67) from 9,364 inquiries received in the third quarter (July 1–September 30, 2018). Among these inquiries, 788 were related to cryptocurrencies, a sharp reduction of 36% compared to 1,231 inquiries in the third quarter.

Looking at nature of inquiries, 235 (29%) were general inquiries and questions, while 228 (28%) related to the results of individual transactions/contracts. The report indicated that 69 inquiries related to industry organizations, including the Japan Virtual Currency Exchange Association.

The report also introduced examples of inquiries and corresponding advice deemed useful for users. As an example of inquiries related to cryptocurrencies, the report listed the inquiry: “I have been solicited to purchase cryptocurrencies and I want to know if the exchange is trustworthy.”

In response to this inquiry, the FSA encouraged the inquirer to check if the applicable exchange is registered with the FSA/Finance Bureau but, at the same time, pointed out that simply being a registered exchange does not ensure trustworthiness. The FSA also issued a warning to users that they should fully understand the existence of various risks posed by each cryptocurrency, including the risk of a sharp decline in price.

In response to an inquiry asking who to talk to when problems occur with cryptocurrency exchanges, the FSA suggested making inquiries to the Japan Virtual Currency Exchange Association for problems related to individual transactions that cannot be resolved with cryptocurrency exchanges.

*This article was written by Fisco