The Financial Services Agency (FSA) of Japan permits the Japan Virtual Currency Exchange Association (JVCEA) to self-regulate local licensed cryptocurrency exchanges
In the past, the cryptocurrency association considered excessive and too frequent government interference as the cause of difficulty in the operations of exchanges.
After the $530 million Coincheck hack, JVCEA has been insisting on the need for the industry to be self-regulated. And after last month’s $60 million Zaif hack, the FSA has given permission to JVCEA to act as a certified fund settlement business association, effective immediately. This means the association can now set parameters and guidelines for authorized domestic exchanges.
The government considers the cryptocurrency industry to be fast-moving and complex; better left in the care of industry experts. These experts have a better understanding of the industry and will be able to situate better regulatory guidelines than bureaucratic government officials.
JVCEA Guidelines at a Glance
A set of main guidelines and regulations are published on JVCEA website.
The association is said to have come up with a hundred page regulatory draft. The draft includes AML procedures, boundaries to prevent insider trading, tighter security measures to protect consumer holdings, and a four-to-one limit on margin trading.
Trading DASH and XMR is said to be prohibited in the hundred page draft. This is due to its privacy-centered characteristic.
The Tokyo-based JVCEA was formed in April of 2018. It comprises of 16 licensed domestic exchanges and is chaired by Taizen Okuyama of Money Partners.