Japan Grants Self-Regulatory Status To Crypto Exchange Associationbr>
Japan’s Financial Services Agency (FSA) has approved an association of 16 licensed domestic crypto exchanges as a self-regulatory industry body.
In a notice on Wednesday, the FSA announced that it has accredited the Japanese Virtual Currency Exchange Association (JVCEA) as a “certified fund settlement business association.” The approval will give the JVCEA the power to oversee the local crypto space, safeguard customer assets, elaborate on anti-money laundering policies and provide working guidelines to crypto exchanges.
“It’s a very fast moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do,” a senior FSA official said in a briefing.
The JVCEA, which was formed earlier this year following the Coincheck hack, filed an application for approval with the FSA in August. At the the time, the association said the approval will enable them to legally contribute “to the sound development of the virtual currency exchange industry and the protection of the interests of users.” The JVCEA proposed measures include prohibiting exchanges from supporting privacy-centric coins, such as Monero and Zcash, and enforcing a strict ban on insider trading. It also proposed a limit on the maximum leverage offered by exchanges for margin trading.
“We will make further efforts to build an industry that is trusted by customers,” the self-regulatory body said in a statement following the FSA approval.
Yuri Suzuki, senior partner at law firm Atsumi & Sakai, said the association’s rules are stricter than the current law and she expects them to help the industry to regain public trust.
“The self-regulatory body’s workload is likely to be heavy and there is an issue of whether it can secure enough staff with expertise in crypto exchange business,” said Suzuki.