Japan’s cryptocurrency industry self-regulators, the Japan Virtual Currency Exchange Association (JVCEA), has been approved by the national Financial Services Agency (FSA) to be officially recognized in its regulatory position, effective immediately.
As reported by Bitcoin News in August, JVCEA applied for recognition from the FSA after establishing a 16 member strong team of licensed cryptocurrency exchanges and producing a nearly 1,000-page report on self-regulatory guidelines for crypto trading platforms to adhere to. Following the USD534 million heist that took place on the local Coincheck platform earlier this year, JVCEA is looking to prevent further incidents by imposing themselves as security inspectors.
Alongside monitoring security measures, JVCEA will handle other specific tasks such as evaluating the integrity of initial coin offerings (ICOs).
The FSA details in its terms of acceptance that the new regulators must issue each cryptocurrency exchange working guidelines, as well as elaborate on the anti-money laundering (AML policies). It must also enforce a set of rules that protect investors’ assets.
JVCEA has already published its key guidelines for cryptocurrency exchanges online, which have gone into full effect now the FSA has officially approved. Officially sanctioned insider bodies already exist in industries such as securities brokerages.
Speaking to Reuters anonymously, an FSA official said that self-regulation of the industry would be more efficient than the Japanese government, with industry leaders more equipped to deal with the fast-paced changes, adding ”It’s better for experts to make rules in a timely manner than bureaucrats do.”
Currently operating with 15 employees, the new watchdog plans to increase this to 20 by next month.
The FSA’s approval keeps Japan on track with some of the most progressive cryptocurrency regulations of any country. Last year it became the first nation to regulate cryptocurrency exchanges, requiring them to register with the FSA.
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