Financial regulators in Japan are investigating the creators of the Line messaging app over a coin used in one of its games.
By law, any form of virtual currency within games must be reported in Japan. However, Line, which has over 200 million users worldwide, has said the coin in question isn’t regarded by the company as a form of currency so it hasn’t declared it, although it has filed other coins.
The law also requires Line to deposit half the amount of its virtual currencies with local bureaus of the Justice Ministry as a means to protect consumers should the company go bust.
The regulators will now assess whether purchases made using the prepaid coin should be classed as currency and therefore subject to regulation under Japan’s Payment Services Act.
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If Line is found to be misrepresenting the coins, it could be facing some hefty fines, which won’t be good for business.
Japan has a history of struggling to regulate virtual currencies and is set to pass new laws on bitcoin regulation in the near future, so moves like this, show the country is serious about implementing its regulations.
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