Japanese Crypto Industry Moves to Self-Regulation
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Oct. 24, 2018
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The Financial Services Agency (FSA) of Japan, the main financial regulator in the country, granted the crypto industry the status of self-regulating, allowing the Japan Virtual Currency Exchange Association (JVCEA) to control the exchanges’ activities.

The local regulator granted the association the status of a “certified fund settlement business association.” Thus, JVCEA was authorized to develop regulations for the local cryptocurrency industry, including measures to prevent insider trading, money laundering, and asset protection.

Representatives of JVCEA said that the rules developed by them come into force on October 24. The organization has developed a 100-page guide for market participants, which, among other things, indicates a complete ban on insider trading and restrictions on operations with anonymous cryptocurrencies. The Association also proposed to limit the size of leverage in margin trading to x4.

Japan Invites Financial Regulators to Discuss Crypto

The organization was formed in March of this year, it received official registration by the FSA in April. In August, the Association submitted an application proposing the creation of a self-regulatory organization that could establish market control rules for the local blockchain industry and issue more stringent standards for companies in this area. The organization includes 16 licensed cryptocurrency exchanges, and its original objectives were to monitor the activities of local trading platforms, ensure their security, and evaluate cryptocurrencies and tokens.

The crypto community has already begun to actively respond to the news. Well-known financial and cryptocurrency analyst Joseph Young expressed his position on Twitter:

It is worth noting that the focus of JVCEA is on the insider trading ban. Earlier, there were cases when the coins became more expensive after the announcement of adding to this or that stock exchange. On this basis, suspicions of market manipulation arose. Such activity will be suppressed by the organization.

Also earlier, JVCEA proposed to ban the listing of cryptocurrency exchanges that cannot point to earlier sellers, since such coins can be used for money laundering. As a result, FSA announced the introduction of a direct ban on cryptocurrencies, which provide a sufficient degree of anonymity for end users. Local exchanges delisted Monero, Dash, Augur, and Zcash.

Bank of Japan: No Plans to Issue Digital Currency

JVCEA was created in March, as a response to the Coincheck hack, to restore public confidence in the crypto industry. The organization is interested in the transparency and efficiency of local cryptocurrency markets. The association wants to prevent a repetition of the Coincheck incident, and for this purpose also offers cryptocurrency trading platforms to provide a better protection for clients' assets and to provide audit results to the JVCEA board.

Recall that in January, attackers stole more than $ 550 million from the CoinCheck cryptocurrency exchange. After this incident, the Japanese government became more serious about the cryptocurrency industry. A large-scale check of trading platforms began in the country, several of them were closed. All exchanges are required to undergo certification. At the same time, the government actively emphasizes that it does not plan to hinder the development of the industry, but, on the contrary, wants to make it as transparent and safe as possible for investors.

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