Japan’s Finance Regulators Grants Self-Regulatory Status to Local Crypto Exchanges
Japan's Finance Regulators Grants Self-Regulatory Status to Local Crypto Exchanges
Japan's Financial Services Agency (FSA) on 24th October, gave the crypto industry self-regulatory status, permitting the Japan Virtual Currency Exchange Association to police and sanction exchanges for any violations.
The Japan Virtual Currency Exchange Association (JVCEA) has now been tasked with the mandate to oversee the operations of exchanges based in the country. The body encompasses 16 crypto exchanges and this license allows it to be a ‘certified fund settlement business association.’ It has been given the mandate to come up with guidelines that will be used to oversee the operations of exchange companies in Japan. This will include anti-money laundering policies as well as setting the standards that will guarantee the security of customer funds on the platforms.
An official of the Japanese FSA noted that the cryptocurrency industry was moving at a fast pace. The official also said that experts in the industry were better suited to make the rules than bureaucrats. The official, commenting on its newly acquired rights, said:
“We will make further efforts to build an industry that is trusted by customers.”
Apart from granting the industry self-regulatory rights, the FSA also published guidelines for new applicants willing to establish virtual currency exchange in the country. At the moment, 160 digital currency exchanges have indicated interest. The Japanese digital currency body initially applied for a self-regulatory status in Q3 2018. This latest news is an actualization of that call.
Japan last year became the first country to regulate cryptocurrency exchanges, as it encourages technological innovation while ensuring consumer protection. Exchanges have to register with FSA. However, both the regulator and the industry were criticized after about US$60 million was stolen from cryptocurrency firm Tech Bureau Corp in September.
Before the incident, the company was slapped with two business improvement orders by FSA following the theft of US$530 million in digital coins at Tokyo-based cryptocurrency exchange Coincheck Inc in January. The regulatory body slammed Coincheck with a business improvement order, following the exchange’s attack.
The body has confirmed the endorsement with a statement on the website stating:
“With the acquisition of the accreditation, we will continue to make further efforts to create an industry that you can trust from everyone who uses virtual currency with members exchanges.”