Japan rules on bitcoin, says it’s not a currency

Prompted by the turmoil surrounding the Tokyo-based Mt. Gox Bitcoin exchange, Japan’s government has finally spoken out on the crypto-currency. Japanese authorities stated today that Bitcoin will not be classed as a currency in the country – however, it will not be regulated as a financial product.

So while Bitcoin is not outlawed in Japan, it is not permitted as a currency, and Japanese banks may not deal with it. Instead, it’s left classified as an unregulated service or investment product. That’s broadly in line with how it’s being treated in other Asian nations, such as China.

(See: Which Asian countries get along best with Bitcoin? Here’s our guide)

A statement from the Japanese government, seen by the Wall Street Journal, states:

Any bitcoin transactions are taxable when they fulfill requisitions stated by laws on income tax, corporate tax and consumption tax.

A document released by Prime Minister Shinzo Abe added:

Bitcoin are neither Japanese nor foreign currencies and its trading is different from deals stated by Japan’s bank act as well as financial instruments and exchange act.

Japan remains unclear on how it might regulate bitcoins and other crypto-currencies, as well as which government agency would be responsible for doing so.

Mt Gox facing up to $500 million loss

Tokyo-based Mt. Gox, once the world’s top Bitcoin exchange, stated on Monday that it has lost “750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us.” They’re worth over $500 million.

Mt. Gox believes that hackers exploited bugs in the online exchange to steal the bitcoins.

(Source: WSJ)