Japanese Minister Denies Ties to Unregistered Crypto Exchange Under Investigation

Seiko Noda, Japan’s Minister for Internal Affairs & Communications, and Minister in charge of Women’s Empowerment, was questioned by the Japanese press on Thursday over her involvement with an unregistered cryptocurrency exchange, which was allegedly violating the Japanese fund settlement law.

Also read: Japan Tax Agency Says Individuals Earning $1,800+ in Crypto a Year Will Declare Tax

It was revealed on Thursday that, on January 30, Noda’s secretary and aide allegedly invited an agent of the FSA and the representative of an unnamed unregistered cryptocurrency exchange operator to her parliamentary office. The said exchange operator was under investigation by the FSA for operating without registration, Jiji Press reported. The FSA had slapped the Tokyo-based company with a warning on January 12, saying it was suspected of violating the law.

Given Her Position as a Cabinet Minister, Noda Risked Being Accused of Exerting Pressure on a Government Investigation

Seiko Noda, Minister for Internal Affairs

“Because there has never been any administrative ties between this company and my office, I believe there is no exerting pressure on the front of this government investigation.” Noda told the press at the Ministry of Internal Affairs, on Thursday.

According to Noda, her secretary and aide solicited an FSA agent for general background briefing regarding crypto exchanges’ legal framework and organized a meeting at her parliamentary office with an acquaintance who represented the company. Noda said she was not present at the meeting. The unnamed company was under government investigation on suspicion of violating the fund settlement law at the time, but Noda’s team claims it was not aware of that fact. An FSA official visited Noda’s office at the Diet members’ building on January 30 to explain Noda’s aide and the representative of the company under investigation the FSA’s positioning on regulations concerning funds raising by issuing cryptocurrency and other matters.

A senior agency official noted that the request from Noda’s office for a briefing could be interpreted as pressure. “A public servant will likely take it as pressure if an aide to a sitting Cabinet member calls for a meeting in which an employee of a company the agency is looking into is also present,” the official was quoted saying to Asahi newspaper.

Noda told reporters that she hasn’t received any political contribution, nor had she made any investment with the company. “I promise I will take more prudent responses in the future.” She added.

The company, which began dealing in its own cryptocurrency in October 2017, received administrative guidance in February 2018 not to continue selling cryptocurrencies.

The Amended Settlement Act

The National Diet, the seat of the Japanese government

Japanese lawmakers amended the Act on Settlement of Funds in May 2016 to regulate businesses handling virtual currencies. This law was amended after Mt. Gox went bankrupt in Japan in February of 2014 due to the misappropriation of customers’ assets by its operator.

In response to these background events, Japanese lawmakers enacted the Amended Settlement Act with three pillars of regulation as follows:

Registration requirements on virtual currency exchange business in Japan; Regulation against money laundering and terrorist financing; and Introduction of rules to ensure customer protection.

What do you think of this Minister’s implication in government investigation into the crypto exchange operator? Share your thoughts in the comments section below!

Images courtesy of Jiji Press and Japan Times.

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