The recent collapse of FTX, one of the world's major cryptocurrency exchanges, has prompted policymakers across the globe to examine stricter regulations for the industry. In Japan, the episode has sparked a sense of deja vu.

In January 2018, a massive hack of Tokyo-based crypto exchange Coincheck saw the theft of about ¥58 billion ($446 million at current exchange rates) worth of digital tokens, sparking calls for stringent regulations and prodding the country’s financial watchdog to initiate a sweeping crackdown on domestic exchanges.

Prior to the Coincheck incident, Japan had been seen as a leading nation in the crypto world, as the country set related regulations ahead of other major nations and enjoyed huge exchange volumes for bitcoin. But the tightened rules cast a pall over the sector, with a slew of the exchanges struggling to keep up with the regulatory standards.