Japan Gives Self-Regulatory Status to Cryptocurrency IndustryOctober 24, 2018
The Japan Virtual Currency Exchange Association has been accorded the self-regulatory status on Wednesday, October 24, 2018, by Japan’s Financial Services Agency.
The Japanese government has been reviewing its approach with respect to the cryptocurrency industry that has been hit twice by large-scale thefts.
The approval from FSA gives the cryptocurrency industry association with the rights to set rules in order to safeguard the assets of customers. The industry is thus approved to take the required steps in order to prevent money laundering and as well to provide operational guidelines. This association will also be having police compliance.
A senior FSA official, in his briefing, stated, “It’s a very fast-moving industry. It’s better for experts to make rules in a timely manner before bureaucrats can do.”
Further, he added, that there are several officially sanctioned bodies like the securities brokerages.
Following the FSA approval, the cryptocurrency industry association stated, “We will make further efforts in order to build an industry trusted by customers,”
Japan in the past year ranked to be the first amongst all the companies in the world to regulated cryptocurrency.
The country encourages technological innovation; however, at the same time, they are seeking to ensure consumer protection. It is important for the exchanges to register with FSA.
The cryptocurrency industry in Japan and the Japanese regulators were greatly criticized after nearly $60 million worth cryptocurrency was stolen. This happened with “Tech Bureau Corp” in the month of September 2018.
There was a $530 million worth cryptocurrency theft at Tokyo-based cryptocurrency exchange Coincheck Inc, early in January 2018. Following this, cryptocurrency companies were slapped with business improvement orders by FSA.
The FSA officials further felt that the crypto industry required a heavy regulatory approach and this should be done without interfering with the standard growth of the company.
Atsumi & Sakai is a Japanese Law Firm. Yuri Suzuki is a senior partner at the law firm. She stated that the rules of the self-regulatory body are stricter than the current law. She expects that the regulations by this Association will help the cryptocurrency industry to win back public trust.
Suzuki stated the point of concern at this point is, “If the self-regulatory body’s workload is heavy if they will be able to secure enough staff with the required expertise in the crypto exchange business.”
Of note, Suzuki closely follows the crypto industry regulation at his home and the overseas.
The FSA has as well-published a set of guidelines for those who will be applying to run the crypto exchange. There are more than 160 entities who expressed interest in the process.
At present, there are 16 approved crypto exchanges. The FSA has not granted new approvals ever since December 2017.
The FSA official stated, “The approval process has become strict as we are looking into more details than before.”