Inquiries Regarding Cryptocurrencies on a Decline, Reports Japanese FSA

By Prashant Jha

Japanese Regulation commission has reported that the inquiries related to Bitcoin and other cryptocurrencies are on the decline. The report cited the observation of the last quarter of 2018, where it received 788 inquiries related to cryptocurrencies, a decline from its previous quarter where the number of inquiries was 1,231.

According to the latest data provided by Japan’s Financial Services Agency (FSA), the enthusiasm around the cryptocurrencies is slowly losing its lustre. The decline in number is evident since the number of inquiries has come down below 1000. To give you a perspective, the FSA a received 3,559 inquiries in the first three months of 2018.

Most of these queries were a general question related to the crypto investments, so does it point out that investors are showing less interest in the crypto space?

Could Bearish Market Trends be a Reason?

The regulation commission believes that the current slump in the number of inquiries could be because of the bearish trends of the crypto trade market. As the prices of Bitcoin has been hovering around $3,400 mark for long.

Last year saw the regulatory body in Japan taking a hard stance against the virtual currencies. There were a number of business improvement orders issued. GMO Coin, the virtual currency business of GMO Internet Inc. (TYO:9449), was among the companies targeted by such orders. GMO Coin was instructed to establish an effective system risk management system.

In the last three months of 2018, the number of inquiries related to investment products surged to 2,264. Out of the total, 875 cases were of general inquiry and questions.

Across assets, 465 cases (or 20% of the total) related to listed stocks, followed by 203 cases (9%) related to FX, and 178 cases (7%) related to investment trusts. There were 227 cases concerning fraudulent investment solicitation, including 164 cases with claims about investors having suffered some kind of damage.

Final Thoughts

The sudden decline in the number of inquiries can mean one of the two things, either people are able to understand the complexities of the cryptocurrency trade market from other sources, or the recent regulatory reforms and the bearish market could have contained the number of investments and thus decreasing the number of inquiries.