Japan’s Cryptocurrency Exchanges Launch Self-Regulatory Body
The exchanges pledge to restore crypto market confidence through self-regulations and stricter security
A group of 16 licensed Japanese cryptocurrency exchanges have launched a self-regulatory body in a bid to restore market confidence, local news outlet Asahi Shimbun reported on Tuesday.
During its first meeting on Monday, the newly-formed organization, dubbed the Japanese Cryptocurrency Exchange Association (JCEA), said it will work alongside the country’s Financial Services Agency (FSA) to develop standards for the crypto trading industry, while also establishing new guidelines for Initial Coin Offerings (ICOs). Members of the association will be required to comply with the forthcoming rules for customer protection and controls, as the JCEA also intends to introduce penalties for activities that undermine the integrity of the industry. The group will also provide help and advice to over a dozen cryptocurrency exchanges that seek registration but currently continue to operate without a license from the FSA.
The list of FSA-registered cryptocurrency exchanges consists of Money Partners, bitFlyer, QUOINE, Bit Bank, GMO Coin, SBI Virtual Currency, Bit Trade, DMM Bitcoin, BTC Box, BitPoint Japan, Bitgate, Bit Argo Exchange Tokyo, BITOCEAN, Xtheta, Fiscalo Currency Exchange and Tech BURO.
The JCEA will be chaired by Taizen Okuyama, president and CEO of Money Partners, one of Japan’s largest foreign exchange firms, which earlier this month announced its foray into the cryptocurrency space after acquiring embattled exchange Coincheck for USD 33.5 million.
“We are working hard to develop security measures and internal control, we will promptly promote the rules of transactions and advertisements and the information we disclose,” Okuyama said, as quoted by Asahi Shimbun. “We want to eliminate customers’ concerns and work to restore confidence in order to develop healthy markets.”
“As financial service operators, we will increase our awareness. We will aim to take security measures that are stricter than before.”, Yuzo Kano, president of bitFlyer and a vice chairman of the JCEA, added.
The creation of JCEA follows the January hack of Tokyo-based exchange Coincheck, which resulted in the theft of around USD 500 million worth of NEM tokens. Since the incident, the FSA has conducted thorough probe into the crypto trading businesses operating in the country and issued a wave of punitive measures against exchanges whose performance was deemed unsatisfactory.
The total value of cryptocurrency trading in Japan increased to JPY 69.1 trillion (USD 636.3 billion) in fiscal 2017. The Coincheck scandal, however, has hampered the industry, the Asahi Shimbun report noted.
The establishment of JCEA confirms earlier speculation about an effort to develop a self-regulatory body for Japan's cryptocurrency exchange ecosystem. Plans began surfacing in early March from two industry entities whose members now make up the JCEA - The Japan Blockchain Association (JBA) and Japan Cryptocurrency Business Association (JCBA).
At the time, Kano, who is also JBA executive director, noted that developing crypto industry standards is crucial, but will not happen overnight.
“There is progress, but it is not yet concrete fact,” he wrote on Twitter at the time.