Yesterday, the 16 cryptocurrency exchanges currently registered with Japan’s financial watchdog, the Financial Services Agency (FSA), announced the launch of the Japanese Cryptocurrency Exchange Association (JCEA), according to a Japanese media outlet.
The self-regulatory body, chaired by Taizen Okuyama, president and CEO of cryptocurrency exchange Money Partners, aims to restore confidence in the country’s digital currency, reports The Asahi Shimbun.
Japanese Cryptocurrency Exchange Association
During its first meeting, the group said that it would seek to develop comprehensive rules regarding customer protection and internal regulatory controls. Members of the association will be required to comply with these rules, as the group also intends to introduce penalties in order to punish activities that undermine the integrity of the industry.
“I will make sure that security measures and internal controls are in place,” Okuyama said. “We want to eliminate customers’ concerns and work to restore public confidence in order to develop a healthy market.”
The initial plans for the launch of the organization were revealed in early-March, when the the Japan Blockchain Association and the Japan Cryptocurrency Business Association came together to launch a new, collective body to work with the FSA on establishing investor safety standards. This was a reassuring move in a country where cryptocurrencies are rapidly increasing in popularity and adoption.
One challenge is that the majority of the problems in the current market have involved exchanges which have yet to be registered with the FSA but are still permitted to operate. A hallmark example of this is Coincheck Inc., which lost the equivalent of 58 billion yen (about $533 million) in digital currency NEM through a hack in late January.
Since then, the FSA has conducted thorough probes into crypto businesses operating in the country and issued a wave of punitive measures against exchanges whose performance was deemed unsatisfactory.
Fortunately, at yesterday’s gathering Okuyama said that the JCEA would aim to offer help and advice on the development of the crypto exchanges that still operate without a full license from the FSA. The association also plans to ask these un-registered exchanges to join the JCEA to help foster cross-industry development:
“I would like to create a situation where I can give advice to (unlicensed exchanges), the development of the industry as a whole is important,” Okuyama said.
Yuzo Kano, president of bitFlyer Inc., and a vice chairman of the JCEA, described the group’s intentions as follows:
“As financial service operators, we will increase our awareness. We will aim to take security measures that are stricter than before.”
The Coincheck hack revealed a number of flaws in Japan’s crypto ecosystem, but instead of the government taking a heavy handed approach, as has happened in neighboring China, the creation of the JCEA reflects a more proactive and constructive approach to developing the industry as things move forward.
Image from Shutterstock.
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