Japan’s Financial Services Agency (FSA) Approves Cryptocurrency Self Regulation
Japan’s Financial Services Agency (FSA) gives the authoritative reins of country’s cryptocurrency industry to the Japan Virtual Currency Exchange Association (JVCEA). According to Reuters, the JVCEA will pose the power to monitor and sanction digital currency exchanges.
The decision that can be pronounced as the self-regulation of the country’s cryptocurrency industry was approved on October 24. JVCEA will now make the regulatory decisions pertaining to cryptocurrency and will also lay down rules to protect investors’ funds and ensuring compliance among exchanges. An official from the Japanese FSA points that the cryptocurrency industry is growing at a fast pace and to ensure better decisions, a team of industry experts are appointed instead of just bureaucrats. The official said:
We will make further efforts to build an industry that is trusted by customers.
Yuri Suzuki, a senior partner of Atsumi and Sakai law firm notes that upon comparing to the present regulations, the rules by JVCEA were severe. He adds that looking into the new status of cryptocurrency in the country, the body will aid in getting back public’s trust in the virtual currency. Furthermore, Suzuki also noted that the self-regulatory body has a tough road ahead. For instance, Involving virtual currency experts as part of their eminent team can be an arduous task for JVCEA.
Alongside granting the industry self-regulatory rights, the FSA drew up the guidelines required by new applicants, who wish to establish virtual currency exchange in the country. Presently, around 160 digital currency exchanges have indicated an incline towards the Japnese cryptocurrency ecosystem. The self-regulatory status was initially applied by the Japanese digital currency body in Q3 2018.
Compare to western virtual currency exchanges, the Japanese ones have somehow faced much more high-profile attacks in the recent years. Following the risk, these attacks pose to the consumers, the FSA employed rules to safeguard customers’ funds and sanction defaulting exchange platforms.
In January, Coincheck, a Japanese digital currency exchange, was hacked and an astounding amount of NEM tokens worth $523 million were stolen. Another Japan-based cryptocurrency exchange, Zaif, took a hit of 5,996 BTC and other altcoins after falling prey o crypto-hackers. FSA took stringent actions following such attacks and served Coincheck with a business improvement order.
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