Japanese Crypto Exchanges File to Form Self-Regulatory Organization
Sixteen Japanese cryptocurrency exchanges have applied to form a certified self-regulatory organization for the industry.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/YFHUIXC4GNGODGCDKFYVC43ISA.jpg)
A group of Japanese cryptocurrency exchanges have formally submitted a detailed proposal to form a self-regulatory organization to the nation's Financial Services Agency (FSA).
The Japan Virtual Currency Exchange Association (JVCEA), which was formed by 16 exchanges in March and registered with the FSA in April, has applied to become a "certified fund settlement business association," the Asia Times reported Monday. This would effectively allow the JVCEA to impose self-regulatory rules on the cryptocurrency trading market as part of an effort to create stricter industry standards.
A working draft of the proposed rules in the nearly 100-page document would require cryptocurrency exchanges to regularly conduct audits, as well as prohibit certain anonymous cryptocurrencies from being traded such as monero or dash, Nikkei Asia reported last month.
Even more recently, the JVCEA said it also wished to limit the amount of borrowing when it came to margin trading, that is trading with borrowed money, to be at a maximum of four times an investor's original deposit, as previously reported by CoinDesk.
These suggestions by the association aim to prevent repeats of troubling incidents such as the Coincheck hack in which an estimated $533 million was taken from the exchange's digital wallets.
It also follows from trends by Japan's Financial Services Agency themselves to crackdown on the cryptocurrency industry by more closely inspecting the activity of licensed cryptocurrency exchange operations, issuing "business improvement orders" aimed at enhancing internal-auditing and user-protection systems.
Documents image via Shutterstock
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.