Crypto-Collapse Resumes After Japan's Largest Exchange Halts Account Creation

What started off as a hopeful week of broadening user adoption is ending on a sour note as Japan's chief regulator launched a probe of crypto-exchanges, prompting the largest to halt account creation sending the entire crypto space lower...

As CNBC reports, the order from Japan's Financial Services Agency, led bitFlyer - the largest crypto exchange in Japan — to suspend the creation of new accounts while it makes improvements to its business, especially as it pertains to its money-laundering measures.

"Our management and all employees are united in our understanding of how serious these issues are, as well as how serious we are in responding to them going forward," bitFlyer said in a statement on their website.

"In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have temporarily suspended account creation for new customers of our own volition," bitFlyer said.

The agency gave the same order to five other other exchanges after finding weaknesses in their anti-money laundering controls.

Bitcoin immediately responded with selling pressure which then extended as Europe woke up and US markets came to life - sending it back below $6500...

And Ethereum back below $500...

 

But the pain is widespread.

"In the long run this is good for the ecosystem," Brian Kelly, founder and CEO of BKCM said in an email to clients.

"In the short run it reduces the flow of new capital...which is bad."

However, on a brighter note for Bitcoin, it appears even The Supreme Court is comprehending the inevitability of this 'new money'... (via Bitcoinist.com)

As part of the summary comments on the case Wisconsin Central Ltd. v. United States, a judge mentioned Bitcoin while discussing “what we view as money” — suggesting it could at least have a future in how employees receive wages.

Justice Stephen Breyer wrote:

A railroad employee cannot use her paycheck as a ‘medium of exchange.’ She cannot hand it over to a cashier at the grocery store; she must first deposit it. The same is true of stock, which must be converted into cash and deposited in the employee’s account before she can enjoy its monetary value.

Moreover, what we view as money has changed over time. Cowrie shells once were such a medium but no longer are; our currency originally included gold coins and bullion, but, after 1934, gold could not be used as a medium of exchange; perhaps one day employees will be paid in Bitcoin or some other type of cryptocurrency.

While Bitcoin achieves only a passing reference, reactions to Breyer were noticeably positive — with even mainstream media suggesting the Supreme Court could ultimately share a progressive stance on what Bitcoin is.