Japanese crypto exchanges may soon have an official self-regulatory body. The Japan Virtual Currency Exchange Association has applied with the country’s financial regulator to become the authority for self-regulation, with the power to enforce rules on its crypto exchange members.
The Japan Virtual Currency Exchange Association (Jvcea) announced Friday that it has applied for certification with the country’s top financial regulator, the Financial Services Agency (FSA).
There are currently 16 government-approved, fully licensed crypto exchanges in Japan; all of them are members of the Jvcea.
The association explained that it is seeking to become a “certified fund settlement business association,” which will serve as a self-regulatory body for crypto exchanges. Its primary objectives include providing “guidance and recommendations to members to comply with regulations, laws and self-regulation rules,” the Jvcea’s announcement reads. The association hopes to contribute “to the sound development of the virtual currency exchange industry and the protection of the interests of users.”
According to To-o Nippo Press:
The Financial Services Agency will carefully examine the affairs of the association and carefully investigate whether proper group management can be expected. It will take 1 to 2 months for the review.
The Jvcea was established in response to the hack of Coincheck in January where 58 billion yen (~US$521 million) worth of the cryptocurrency NEM was stolen. It aims to restore public trust in the crypto industry.
Japan also has two other crypto associations which predate the Jvcea: the Japan Blockchain Association (Jba) and the Japan Cryptocurrency Business Association (Jcba). Most crypto exchanges in the country are members of one or both of these organizations.
The association has reportedly drafted self-regulation that includes a number of restrictions on how crypto exchanges operate. In June, local media reported that privacy coin listings will be restricted and a ban on insider trading will be imposed.
“We also submitted voluntary rules on margin trading and insider trading [to the FSA],” Jiji Press quoted the association:
If it [the Jvcea] is approved as a self-regulating organization, it will be possible to enforce disposition and investigation of member exchanges, expulsion of membership…in a mandatory manner.
According to the publication, the FSA “plans to entrust the organization with the flexibility to rapidly develop technologies and to combine technological innovation and customer protection.”
The association wrote, “We will work closely with registered virtual currency exchange traders and all those who support us while fully working to restore users’ trust in domestic virtual currency handlers and markets.”
What do you think of the association’s efforts? Do you think Japan should have a self-regulatory authority? Let us know in the comments section below.
Images courtesy of Shutterstock.
Need to calculate your bitcoin holdings? Check our tools section.