Japan Certifies Self-Regulatory Body for Cryptocurrency Exchanges

Japan’s Crypto Scene Takes a Leap

In a move as bold as eating sushi with chopsticks in one hand and a fork in the other, Japan’s Financial Services Agency (FSA) has officially granted self-regulatory status to the local crypto industry. This means that the Japanese Virtual Currency Exchange Association (JVCEA) is now in charge of overseeing the ever-evolving realm of cryptocurrencies. Talk about a power-up!

What This Means for Customers

The FSA is not just kicking back and popping popcorn while the crypto world spins. They expect the JVCEA to implement regulations that will protect customers’ assets and develop an anti-money laundering (AML) policy that doesn’t feel like reading a funeral home brochure. This includes giving clear guidelines to crypto exchanges to help them play by the rules.

Why Experts Over Bureaucrats?

In the wise words of an unnamed FSA official quoted in a Reuters article, “It’s a very fast moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do.” It seems that in the rollercoaster that is cryptocurrency, seat belts are important, and it’s better to have them fastened by those who truly understand the bumps and turns.

The Road Ahead

The self-regulation kicked in immediately, with effective rules already being published on the JVCEA’s website. With 15 team members (don’t worry, they’re not all just crypto enthusiasts with a dream), the organization plans to expand its staff to 20 by November. It’s like the Avengers, but for digital currencies!

A Brief History Lesson

Established in April 2018, the JVCEA was formed by 16 companies that had already registered as cryptocurrency exchanges. This rewriting of the script came after the jaw-dropping January hack where over $534 million worth of NEM disappeared from Japan’s Coincheck exchange. If that doesn’t scream “time to tighten up,” I don’t know what does!

Lessons from the Past

After the unfortunate August hack of Japanese exchange Zaif, which lost nearly $60 million in crypto assets, the JVCEA swiftly implemented tougher regulations for “hot wallets.” They even hinted at limiting the amount of digital currency that any exchange could manage online, proving that sometimes, a little bit of paranoia goes a long way in the crypto space.