The Japanese government has issued a statement on how to regulate bitcoin, on the same day as 180,000 bitcoins linked to collapsed Tokyo-based exchange Mt Gox are transacted

This article is more than 6 years old

This article is more than 6 years old

The Japanese government has declared bitcoin a potentially taxable entity in its preliminary analysis of the currency.

In its statement, released March 7, the government cites 11 different laws and regulations to conclude that bitcoin is not a currency or asset covered by conventional trading laws.

It also concurs with the assessment delivered by US Federal Reserve chief Janet Yellen in February that trading in bitcoin does not legally overlap with banking, nor is the currency a financial instrument.

The government leaves open the possibility that bitcoin can be taxed under income, corporate or consumption tax laws, however, and it restates that money laundering regulations can cover the currency.

Japan’s assessment of bitcoin was prompted by the collapse of the Tokyo-based MtGox bitcoin exchange, which closed its website in late Febraury and declared bankruptcy shortly after.

In the company’s “application for commencement of a procedure of civil rehabilitation” – the Japanese procedure analogous to bankruptcy – it declares that around 850,000 bitcoins, belonging to users and Mt Gox itself, “had disappeared”.

But members of Reddit’s bitcoin subforum discovered a transaction, dated Friday, of 180,000 bitcoins – worth around £70m – which appears to be linked to Mt Gox. The money comes from four bitcoin wallets, each of which have been inactive since 2011, and each of which is linked through a chain of transactions to a wallet known to be held by Gox. The movement of the money suggests a resoluton of sorts may be close at hand.

• MtGox CEO speaks out