Japan, recently suffering one of the world’s most public displays of Bitcoin failure in MtGox, is now set to monitor illegal transactions of the crypto-currency amid fears that Japan’s crime organizations could use bitcoins for money laundering or drug dealing. Still, the country stopped short of regulating the trading of the online digital currency saying that this is not under the government’s purview, this statement coming from ruling party officials on Tuesday.
According to sources close to the issue, Japan’s Ministry of Economy, Trade and Industry is set to develop a basic plan on how to monitor illegal transactions involving Bitcoins. Japanese Prime Minister Shinzo Abe and his administration officials will reportedly define Bitcoins not as a traditional “currency” but a new type of “value-added electronic record,” similar to credit card and electronic money transaction records, this still according to the same sources. The government warns consumers that they will continue hold sole responsibility for Bitcoin trading, saying that Japan will not enforce strict rules on the trading of said online currency.
Before MtGox’s spectacular implosion, Bitcoins have been drawing positive attention from global investors due to their ease of use in cross-border exchanges, not to mention the anonymity it provides. But in late February, Tokyo-based MtGox – once the world’s leading Bitcoin exchange – mysteriously went offline and afterwards declared bankruptcy, heavily damaging whatever confidence there was in virtual currencies. MtGox, believed to have had up to a million users, claimed that it was hacked in early February and consequently lost about 11.4 billion yen worth of Bitcoins.