Japan Has At Least 3.5 Million Cryptocurrency Traders, According to New Report

Japan's Financial Services Agency (FSA) finally released data about the country's cryptocurrency trading. The new data could position Japan as an unexpected hub of cryptocurrency trading. 

The FSA collected data from 17 crypto exchanges and their activity as of March 31, 2018. In total, the organization estimated that there are at least 3.5 million people trading in cryptocurrencies as viable assets. 

A wide majority -- roughly 84 percent -- of those trading in cryptocurrencies are between the ages of 20 to 40. Twenty-year-olds make up 28 percent of the investments. Thirty-year-old investors make up the largest percentage of investors at 34 percent. Those in their 40s constitute 22 percent of the country's total crypto trading population.

The data release comes as one of Japan's first efforts to bring more transparency into its crypto trading industry, especially after domestic exchange Coincheck (based out of Tokyo) was hacked recently. That hack led to losses totaling roughly 58 billion yen (or $533 million) in virtual currency. The FSA noted that the study and disclosure of information to the public could lead to a more comprehensive examination of issues surrounding cryptocurrency trading in Japan. 

The FSA also included the trading volume of bitcoin in Japan. It noted that the volume swelled from $22 million in March 2014 to over $97 billion by March 2017. The FSA included trading on margins, credit and futures of bitcoin as an underlying asset grew from $2 million in 2014 to $543 billion in 2017. 

Small Crypto Exchanges Falter

However, recent reports have surfaced that smaller cryptocurrency exchanges are calling it quits under the increased oversight of the FSA. Since the FSA released its report, six exchange operators announced they want to drop their applications to become registered exchanges, according to the Japan Times.

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“Compared to other industries, financial businesses are strictly monitored by regulators,” said Yasutake Okano, senior consultant at Nomura Research Institute. “Operators need high-level security systems and (proper) management and human resources, which come with quite a lot of investment.”

One startup spokesman told the newspaper that he wanted to withdrawal because the company was unable to get workers with the skills needed to meet FSA standards.

“The regulation has put exchange operators under the supervision of the FSA. This means that we have become financial companies” that had to meet the rigorous standards of business management, said the anonymous spokesperson. 

However, as bitcoin and global cryptocurrency trading continues to boom and decline rapidly, more governments have considered increased regulations to give some semblance of security to a notoriously volatile trading industry.