Japanese Banking Giant Wants To Prevent Another Mt. Gox
Japan’s Mitsubishi UFJ Trust and Banking is preparing to launch a service that will protect cryptocurrency holders if the exchanges they use shut down or are hacked, reports Japan-based online publication Nikkei Asian Review.
The banking giant will keep matching records from cryptocurrency exchanges of customers who opt-in for the scheme. In the event the exchange fails or is compromised, Mitsubishi UFJ will compensate its clients for their losses according to the records they maintain.
Nikkei reports that the service will start with Bitcoin trading and could launch as early as April. Crypto exchange users who opt-in to have their funds protected by the Mitsubishi UFJ will be charged a fee for the service.
However, as CEO of Tokyo-based exchange Bitbank Noriyuki Hirosue asserts, the extra fee may be an easy price to pay for those who prefer to trust traditional financial institutions:
“customers will feel peace of mind knowing that a trust bank is managing their assets.”
Japanese cryptocurrency investors are arguably especially sensitive to the risks of using crypto exchanges — major Japan-based cryptocurrency exchange Mt. Gox infamously shut down in 2014 after hackers stole 850,000 of its customers’ bitcoins.
Japan is well-known as a global leader in cryptocurrency investment and regulation. Nikkei reports that Japan’s Financial Services Agency is set to recognize cryptocurrencies as assets that can be placed in trust by April 2018.