Japan approves cryptocurrency self-regulation
October 24th has marked yet another winning milestone in the cryptocurrency industry. After two shocking thefts that happened at the Japan-based exchange platform Coincheck in January, and then in April of this year, experts took control over the situation in their own hands.
Japan’s Financial Services Agency (FSA) has officially approved the establishment of the Japan Virtual Currency Exchange Association (JVCEA) as an official regulatory industry body for the cryptocurrency industry. The body consists of 16 domestic cryptocurrency exchanges, with over 160 cryptocurrency industry companies interested to join.
According to the 100-page self-regulatory guidelines document drafted by the JVCEA, there’s a list of rigorous rules to be set, such as a complete ban on insider trading and privacy coins from licensed exchanges. Additionally, the association has also proposed a 4-to-1 limit on margin trading with cryptocurrencies, which would restrict the amount of funds investors can borrow from their original deposit.
“With the acquisition of the accreditation, we will continue to make further efforts to create an industry that you can trust for everyone who uses virtual currency,” the JVCEA said in an official statement today.
According to Yuri Suzuki, senior partner at law firm Atsumi & Sakai, the self-regulatory body’s rules are stricter than the current law and she expects that JVCEA will help to regain the public trust in the industry.
With cryptocurrency being an extremely fast-moving industry, it’s better for experts to make rules in a timely manner, rather than waiting for bureaucrats to do so, financial analysts say. With its recent move, Japan officially became the pioneer on the path to further include the cryptocurrency in our everyday life, and with this country being on the front lines of technological innovation for decades, we may expect others to establish similar self-regulated industry bodies soon.