This is a false understanding about regulations. Regulations in Japan are not made to destroy bitcoin but rather to protect people and their economy. These rules will marry bitcoin and Japans financial and economic industry. This means that Japan is keen on protecting their people while engaging on cryptocurrency. If only those exchanges will follow the regulations set up by the government then there will be no problem.
So that is very good for the people and help to save their country from scams and getting hacked.But these is not a problem for the crypto field this is only problem for the exchange owner with poor security features.