Regulations on financial institutions break down into several categories:
1) Identifying operators and users, so if fraud happens, the right people can be found and held accountable
2) Requiring paperwork documenting what is happening, again, so if there is a fraud of some kind it can be detected and the responsible parties found
3) Actually trying to prevent fraud, usually this means mandatory audits of some kind
I can't point you to what rules govern a currency exchange in Japan exactly, but the above is how it usually seems to break down.
Gox was AFAIK never audited. How much of a paper trail exists is unclear. The relevant people's identities are known, however.
One other thing I think we should clear up: these rules are usually pretty vague and general. It's not like regulation is something that people opt into or out of depending on their personal preferences. Whatever regulations applied to exchanges and markets in Japan would likely have also applied to Mt Gox.
The problem with trying to argue that the fix is "regulation" in the abstract is "regulation" isn't some singular silver bullet. It's a big pile of rules and people who try to enforce those rules, but often those rules aren't doing what you think they're doing, or they exist to allow punishment rather than prevention, or they're somewhat theoretical because they aren't reliably enforced. This is why lots of people would dearly love to find a way to build a decentralised exchange: in theory it could be more reliable than a regulated institution.
1) Identifying operators and users, so if fraud happens, the right people can be found and held accountable
2) Requiring paperwork documenting what is happening, again, so if there is a fraud of some kind it can be detected and the responsible parties found
3) Actually trying to prevent fraud, usually this means mandatory audits of some kind
I can't point you to what rules govern a currency exchange in Japan exactly, but the above is how it usually seems to break down.
Gox was AFAIK never audited. How much of a paper trail exists is unclear. The relevant people's identities are known, however.
One other thing I think we should clear up: these rules are usually pretty vague and general. It's not like regulation is something that people opt into or out of depending on their personal preferences. Whatever regulations applied to exchanges and markets in Japan would likely have also applied to Mt Gox.
The problem with trying to argue that the fix is "regulation" in the abstract is "regulation" isn't some singular silver bullet. It's a big pile of rules and people who try to enforce those rules, but often those rules aren't doing what you think they're doing, or they exist to allow punishment rather than prevention, or they're somewhat theoretical because they aren't reliably enforced. This is why lots of people would dearly love to find a way to build a decentralised exchange: in theory it could be more reliable than a regulated institution.