Sofiko is a freelance fintech copywriter at Coinspeaker. With a Bachelor degree in International Business and Economics, Sofiko has been deepening her knowledge of an agile innovative industry primary focusing on the robust blockchain technology and cryptocurrencies. As a bank employee, Sofiko particularly keens on crypto and blockchain integration into the established banking systems.
Japan who’ve been considering legal aspects of cryptocurrency for quite a time, finally made its mind and granted an alliance of 16 crypto-exchanges with regulatory rights over the industry.
Wise men say that all of the novelty needs to be treated with caution. Being, perhaps, the most intriguing breakthrough of their times, cryptocurrencies at once spark a lot of fear and admiration. Therefore the global community decided to step into carefully, saving time for a deeper consideration of the inner sense of such an ambiguous fenomenon.
For Japan it took a couple of months before the country’s Financial Services Agency (FSA) agreed on a regulatory framework suitable for the crypto-sphere. Today it has become known that Japanese primary financial regulator delegated the rights to control and monitor the crypto-industry to a group of 16 crypto-exchanges that was legally recognized as a self-regulatory body.
What is the Japan Virtual Currency Exchange Association?
Earlier Coinspeaker reported that the group also known as the Japan Virtual Currency Exchange Association (JVCEA) submitted an application to the FSA with a view to become a “certified fund settlement business association”. In case their application is approved, a self-regulatory body of 16 formally licensed Japanese crypto-exchanges would be formed.
The organization is pursuing a goal to fight against illegal activities taken place in the industry in accordance with tough self-imposed rules and practices. The idea of JVCEA has emerged in the aftermath of infamous heist of the major cryptocurrency exchanges operating in Japan.
Seeking to protect their own funds as well as money of their customers Japanese exchanges have joined forced to combat insider trading and money laundering while creating security standards and guidelines for domestic exchanges.
The JVCEA to Police Domestic Exchanges
The decision made by the FSA was a long-awaited one that signals the government has finally laid down their weapons allowing the industry to take care of itself. During a briefing a senior FSA official said:
“It’s a very fast moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do.”
In a statement following the FSA approval, the cryptocurrency industry association reassured the public that it will make further efforts to build an industry trusted by customers. This comes very timely since Japan is going to back the reputation of blockchain-friendly county, which is welcoming every technological innovation made in the sphere.
The JVCEA has reportedly drawn up a 100-page self-regulatory draft with rules including a proposal a complete ban on insider trading and privacy coins like Monero and Dash from licensed exchanges. The association has also proposed a 4-to-1 limit on margin trading with cryptocurrencies, restricting the amount of funds investors can borrow on their original deposit.
The FSA’s approval of a cryptocurrency self-regulatory body comes at a time when Japanese authorities are reviewing a new system of crypto-taxation that will facilitate tax filing and make it easier for taxpayers to calculate their profits on the sales of digital assets against both fiat currencies and other cryptocurrencies.