Following a recent hack resulted into $533 million-worth theft of the NEM token from Coincheck, a group of 16 registered Japanese cryptocurrency exchanges joins forces to establish a self-regulatory body in April.
Major hack of the Japanese largest crypto-exchange planform pushes forward a tipping point of developing its own regulatory structure within expanding digital ecosystem that is set to bring the era of cryptocurrency “anarchy” to an end under a strong self-regulatory scheme.
As no one knows the town better than its own citizens do, this incentive seems more appropriate comparing to an exhausting anticipation of long-term government decisions that will perfectly adjust to the innovative environment as well as control and protect its members.
But who would be the pioneer to trial the path of self-governance if it was not Japan that is considered as the most crypto-friendly nation on the planet, contributing the largest crypto-trading volumes on the market.
According to the data provided by Nikkei, two major cryptocurrency trade outfits in Japan are coming together to form a new self-regulatory body that will work together with the Financial Services Agency (FSA), the country’s financial regulator, to establish guidelines for initial coin offerings and roll out standards improving security measures among the group of licensed cryptocurrency exchanges.
The self-regulatory body, currently untitled, sees the collaboration of the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA). After reaching consensus last week, the two groups are planning the first norms to meet the wider industry in early April.
The new entity will see its chairman in Taizen Okuyama, president of forex trading firm Money Partners Group and current chairman of the JCBA. Yuzo Kano, CEO of exchange startup bitFlyer and the head of the JBA, will serve as the vice chairman of the new group.
Notably, the popular bitFlyer is currently the world’s largest Bitcoin exchange and contributes about 25 percent of the world’s trading volumes. It also appeared to be one of the first Japanese cryptocurrency exchanges to be granted with licenses to seamlessly operate in the country as well as in Europe and the United States.
The reported goals of the new entity do not differ from the one announced previously in February. The main priority remains the enforcement of self-imposed rules aimed at protecting exchange users’ assets. Through the upcoming entity’s guidelines, the group of sixteen exchanges will focus on avoiding system downtimes along with curbing insider trading.
Moreover, the question of penalties for breaches will also be also under review. All this should lead to increasing the level of transparency in the cryptocurrency ecosystem as well as to enhance confidence from the side of traditional financial industry and crypto community.
The move describes an intention to shore up public confidence referring to the infamous theft from Coincheck caused half-billion losses for the NEM token holders while the Japanese exchange has not been fully approved by the financial regulator due to emerging security issues that the FSA had stated to alert Coincheck before the heist took place.