Japanese Cryptocurrency Exchanges Can Now Police Themselves

Japanese cryptocurrency exchanges have been given full license to create their own regulations.

So what’s going on?

Earlier today, the country’s financial regulator, the Financial Services Agency (FSA), granted the Japan Virtual Currency Exchange Association (JVCEA) a self-regulatory status.

The JVCEA is made up of 16 licensed and domestic crypto exchanges. Its members are Bitflyer, Money Partners, Bitbank, Bitpoint, Quoine, SBI Virtual Currencies, Fisco Virtual Currency, Btcbox, Zaif, GMO Coin, Bittrade, Tokyo Bitcoin Exchange (DMM Bitcoin), Bitarg Exchange Tokyo, FTT Corporation, Xtheta Corporation, and Bitocean.

The FSA has declared the body as a “certified fund settlement business association.” With this new status, it puts regulation responsibility in JVCEA’s hands. The body can now police its own exchanges.

JVCEA can now implement its own rules and guideline for domestic crypto trading. In doing so, it can create measures to protect customer assets and improve security, whilst also curtailing insider trading, theft, and money laundering.

And this is exactly what the body was created to do; to regulate, protect, and give legitimacy to an industry that has suffered major hacks.

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In August, JVCEA submitted an application to the FSA to become an accredited body. After two months and a rigorous reviewing process, it is now an officially recognized body. The financial regulator had to “carefully examine the affairs of the Association and investigate whether proper group management can be expected.”

Now Japanese cryptocurrency exchanges can move forward and take control of the industry. JVCEA has already begun enforcing new rules effective immediately. The body has created a 100-page document with rule proposals. One example is a complete ban on privacy coins such as Monero and Dash from licensed exchanges. Another is a limit on margin trading with crypto.

JVCEA said on the news:

“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].”

Japan’s crypto exchanges have been reeling from massive hacks. Notable thefts include January’s $530 million theft from Coincheck and the more recent Zaif exchange heist.

Featured Image: Depositphotos/© akulamatiau

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