Japanese regulators tackling cybercrime in the cryptocurrency world

Japanese regulators are increasingly focussing on the legal issues surrounding cryptocurrencies. On October 18, the cybercrime division of the Metropolitan Police Department arrested the head of an online exchange for the cryptocurrency 'Ripple'. Mr Yuki Takenaka was arrested on suspicion of fraud involving JPY 17 million. More specifically, he was accused of misappropriating funds deposited with the exchange platform he ran, which were funnelled into his own foreign exchange margin trading. Furthermore Mr Takenaka allegedly issued debt instruments from the exchange to himself and exchanged them for cash at other exchanges. This arrest comes against the background of an embezzlement case for the bitcoin exchange (Mt. Gox) which continues in the Tokyo District Court and further revisions of the Payment Services Act. The latter development, insofar as it relates to cryptocurrency exchange operators, came into effect this month and submits cryptocurrency operators to the broader financial services registration system.

First steps in the corporate governance overhaul following the Shoko Chukin loan scandal

We had previously reported, in June 2017, the sanctioning of Shoko Chukin Bank by Japanese regulators over its implementation of low-interest rate finance programs which involved the issuance of loans valued at JPY 20 billion ($180 million) to ineligible borrowers. The bank has this month announced the first measures in its corporate governance response following the discovery of wrongdoing. This has involved a significant change in the senior management of the bank with the president, Mr Kenyu Adachi, announcing he will retire 'at the appropriate time' and the tenure of three deputy presidents will not be renewed. Other senior executives will be punished via cuts to their remuneration with 813 employees to be punished in an unspecified manner. An independent panel of experts will reportedly convene as soon as possible this year to examine structural changes to implement the Ministry of Economy, Trade and Industry's ("METI") insistence on improved corporate governance.

Nissan data falsification leads to 1.2 million vehicle recall

Following inspections last month of Nissan Motor Company Ltd. (Nissan) by the Ministry of Land, Infrastructure, Transport and Tourism, it was revealed that  the company had used uncertified technicians to carry out final inspections leading to a recall of 1.2 million vehicles produced for the domestic market. Despite the malpractice coming to light and the announcement of initial countermeasures, Nissan acknowledged that wrongdoing continued. Accordingly the company and its affiliate, Nissan Shatai, have suspended domestic production while it reconfigures inspection lines. The matter continues to be investigated by the Ministry. The ramifications are still unclear although Minister Keiichi Ishii noted that the ministry “will respond harshly if specific facts are confirmed.”

Subaru data falsification the latest to hit Japanese manufacturers

In a similar scandal to that faced by Nissan Motors (above), Subaru Corporation has also admitted that uncertified staff performed final quality checks. The admission comes off the back off the Ministry of Land, Infrastructure, Transport and Tourism's order to all automakers following the Nissan scandal. The extent of the impropriety is unknown but the company has stated that it may extend back to when the in-house inspection rules were established some 30 years ago. All uncertified employees have stopped their involvement in inspections.