New reports from Japan affirm the nation’s financial watchdog has given a self-regulatory standing to the crypto market.
The decision will allow the Japan Virtual Currency Exchange Association (JVCEA) to bring new principles for Japanese crypto markets, as well as to sanction those that fail to honor.
New Move Expected to Improve Exchange Security and Regulations
Due to several large attacks on Japan’s major digital money exchanges, the government has been searching for a means to reduce those risks. The move marks a new approach to coping with this, in addition to some other problems, like money laundering.
Therefore, it’s going to have better chances of establishing itself if the rules are made by experts. Because of This, this industry is expected to become more secure and much more trustworthy
The attackers managed to breach the market’s defenses and stole roughly $530 million in NEM tokens. While the tokens were created useless shortly after the attack, the incident still damaged many traders.
As a result, the JVCEA has been formed, and also in August 2018, they submitted a formal program, asking recognition and the capacity to regulate exchanges. The FSA responded that the practice of reviewing the request will need two months. Today, after careful examination, the FSA decided to give the application with an official approval.
Details of the FSA Conclusion
According to Reuters, the Japanese financial regulatory body, FSA, has given the Japan Virtual Currency Exchange Association (JVCEA), the capacity to monitor and sanction digital currency trades. Section of the JVCEA’s regulatory purposes comprises laid down rules that protect investors’ funds and ensuring compliance among markets.
The JVCEA has reportedly drawn up a 100-page self-regulatory draft with rules such as a proposal a comprehensive ban on insider trading and privacy coins like Monero and Dash from accredited trades.
The institution has also proposed a 4-to-1 limitation on margin trading with cryptocurrencies, restricting the number of funds investors can borrow on their own original deposit.
The official also said that specialists in the industry were far better suited to make the principles than bureaucrats.
Experts agree that this choice is justified, particularly since both, the ruler, in addition to the entire industry were heavily criticized due to large-scale attacks that happened this year.
In an effort to stop such episodes, the FSA scrutinized registered exchanges, issuing a warning to several of them. It has also demanded that they improve their safety measures. While the regulator only closed one exchange, many others decided to shut down by themselves.
Despite all of the problems, it seems that the market industry continues to grow in Japan. So much so, that the FSA had to launch a fresh set of guidelines for people who want to run their own trades. So far, the agency reported that 160 entities are interested in beginning a crypto trading business.
Right now, Japan has 16 registered exchanges, with no fresh approvals since December 2017.