On October 24, the Financial Services Agency (FSA) Japan granted the Japan Virtual Currency Exchange Association (JVCEA) the power to monitor and sanction crypto exchanges. In the wake of the recent large-scale hacking attacks, the government had been reviewing its approach towards the cryptocurrency industry.
After receiving the self-regulatory status, the JVCEA will now have the rights to set up rules to prevent money laundering, safeguard customer assets and give operational guidelines. The JVCEA will also have monitor compliance of the exchanges. A senior FSA official said in a briefing that it is better for experts instead of bureaucrats, to make rules in a timely manner. The official, however, spoke on conditions of anonymity.
The crypto industry and the Japanese regulator were criticized after around $60 million was stolen from crypto exchange Tech Bureau Corp in September. Following the FSA approval, the cryptocurrency industry association said that it will make further efforts to build an industry that is trusted by customers.
Some FSA officials are of the opinion that the crypto industry is in need of a heavier regulatory approach without stifling its growth. A senior partner at law firm Atsumi & Sakai, Yuri Suzuki stated that the JVCEA’s rules are stricter than the present law. She expects these strict rules to help the crypto industry to regain the trust of the public, as reported on Reuters Japan.
On October 24, the FSA also published a set of guidelines for those applying to run crypto exchange in the country. As of now, there are around 160 entities who have expressed their interest. The JVCEA had initially applied for a self-regulatory status in Q3 2018. This latest approval from FSA is an actualization of that call.
The JVCEA announced stricter regulations for “hot wallets” after the hack of crypto exchange Zaif in August which resulted in a loss of 6.7 billion yen worth of crypto assets belonging to both the company and its customers. The organization also plans to set a limit on the amount of cryptocurrencies that could be managed online by any crypto exchange, as stated in the Cointelegraph report.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]