Japan Virtual Currency Exchange Association (JVCEA) to Impose New Crypto Asset Rules
Japan’s Self Regulatory Agency to Impose New Rules on Customer Asset Management
Japan’s self-regulatory agency JVCEA is planning to tighten the customer asset management measures. The information has been revealed by ‘informed sources’ on September 30 to the Japan Times.
The self-regulatory body controls and oversights the most important and licensed exchanges in Japan. The association was established at the beginning of the year after different situations that took place in Japan. Coincheck, one of the most known exchanges in the country experienced a hack, and Zaif had some technical issues that affected trading.
The organization is working in order to tighten the rules related to the number of virtual currencies that exchanges can manage on their own accounts. The Japan Times informs that the limit will be set between 10 and 20 per cent of customer deposits. Additionally, the agency will be updating its rules.
In general, crypto exchanges store customers’ funds offline on cold storage wallets, increasing the security levels of the company. However, there are some wallets that are connected to the internet and that store users’ funds, making them more vulnerable to hacks and attacks. The new rules implemented by the JVCEA will limit this number of assets that can be stored on online wallets by exchanges.
The crypto exchange Zaif has been hacked some days ago losing 59.7 million dollars worth of virtual currencies that belonged to the company and its users. However, this was not the largest attack experienced by a Japanese crypto platform. As mentioned before, Coincheck was hacked and lost $523 million dollars worth of NEM coins, one of the biggest hacks ever in history.
At the moment, Zaif does not know whether it will be able to give back customers’ funds. Because of this reason, the FSA has launched an important investigation that will verify the conditions in which the company currently is.