The primary Japanese financial watchdog, the Financial Services Agency (FSA), has now announced that it has granted the Japanese cryptocurrency industry a self-regulatory status.
More specifically, the FSA has certified an industry body, the Japanese Virtual Currency Exchange Association to oversee the space and become a ”certified fund settlement business association”, according to a recent report from Coinbase Japan.
This certification means that domestic cryptocurrency exchanges in Japan will henceforth be encouraged to follow guidelines created by the JVCEA. Moreover, the Japanese Virtual Currency Exchange Association (JVCEA) consists of all Japan’s 16 licensed cryptocurrency exchanges.
Specifically, measures are being taken in order to prevent insider trading and money laundering, as well as to introduce stricter security benchmarks in an effort to further protect consumers’ assets.
Furthermore, the industry became self-regulating in conjunction with the announcement, and the JVCEA intends to expand its staff from 15 people today to 20 in November in order to handle the increased workload intended to stem from the industry body’s position as a rule maker in the cryptocurrency exchange space.
The JVCEA has already posted some core regulations and guidelines on its website.
Furthermore, this decision does not come out of the blue. The JVCEA was founded in April of this year, something which was brought about by the $534 million hack of the Japanese cryptocurrency exchange Coincheck.
August saw the JVCEA submit an application to the FSA where they tried to gain recognition as a cryptocurrency industry organ. The JVCEA was subsequently reviewed and examined during the following two months, but it has now earned its sought-after accreditation as a cryptocurrency industry watchdog.
A statement on the JVCEA’s website notes that ”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].”
Despite not becoming an official regulatory cryptocurrency industry body until today, the JVCEA has already begun work on proposing multiple rules and guidelines.
The organization has supposedly produced a comprehensive, 100-page self-regulatory draft report, containing a veritable plethora of proposed rules – such as a suggestion to completely ban insider trading as well as privacy-centric coins in the vein of Dash and Monero from being traded on licensed exchanges.
In addition to this, the JVCEA has also proposed introducing a ”4-to-1 limit” that would cap margin trading with cryptocurrencies, something Toshi Times has previously reported on.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.