Japan’s leading financial watchdog has announced a world-first measure that will allow the country’s cryptocurrency exchange industry to self-regulate.
The Financial Services Agency (FSA) this week granted the Japan Virtual Currency Exchange Association (JVCEA) the status of a ‘certified fund settlement business association.’
The JVCEA is a cryptocurrency exchange industry body, comprised of all 16 licensed domestic exchanges in the country, and with its new powers, will be charged with monitoring the domestic crypto-industry.
“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, according to a report by Reuters.
The JVCEA will be empowered to draw up guidelines for domestic exchanges which will include consumer protection measures, rules to curtail insider trading and money laundering and ensure compliance.
As we reported in March, the JVCEA was formed in the aftermath of a US$500 million theft of cryptocurrency from Tokyo-based exchange Coincheck, by an industry desperate to reassure investors’ confidence in cryptocurrency exchanges.
This week’s announcement by the FSA follows a 2-month review of the JVCEA in order to “carefully examine the affairs of the association and investigate whether proper group management can be expected.”
The industry association confirmed its accreditation in a statement on its website today, saying:
“With the acquisition of accreditation, we will continue to make further efforts to create an industry that you trust from everyone who uses virtual currency with [our] members.”