After the Mt. Gox cryptocurrency exchange was stung by a half-billion dollar theft in 2014, Japanese regulators swung into action.
Their goal was to craft rules that both protected traders and allowed a promising sector to flourish. By last April, they thought they had arrived at a set of guidelines that did just that.
Japan’s national system to oversee cryptocurrency trading was the world’s first, rolled out even as policymakers elsewhere grappled with how to deal with the sector. Under the Japanese framework, some exchanges would be allowed to operate - even though they hadn’t yet won regulatory approval.
One of those was Coincheck Inc. Last month, hackers stole about $530 million from the Tokyo-based exchange, a theft rivaling Mt. Gox’s as one of the biggest ever for digital currency.
The Coincheck heist exposed flaws in Japan’s system. And for some experts, it raised questions over the country’s dash to regulate the industry - a sharp contrast to clampdowns by countries like South Korea and China.