5 Japanese Crypto Exchanges Join the Country’s Self Regulatory Association
News reaching Ethereum World News indicate that the Japanese self regulatory organization known as The Japan Virtual Currency Exchange Association (JVCEA) has welcomed five new cryptocurrency exchanges into their ranks. The entry of these 5 crypto exchanges is unique in the sense that up until now, members of JVCEA were regulated crypto exchanges. The new members have not yet received the go ahead from the FSA to operate in Japan. As a result, they join the JVCEA as a different, second class of members.
Of the new members, three are categorized as ‘cryptocurrency dealers’ as their applications with the Financial Services Agency (FSA) to become crypto exchanges are currently being reviewed. The three exchanges are Coincheck, Everbody’s Bitcoin and Lastroots. The other two members are not yet registered with the FSA and are not allowed to operate in Japan. They are Lvc Corp. and Coinage Corp.
The move to self regulate crypto exchanges in Japan was approved by the FSA back in late October of last year. This decision formed the Japan Virtual Currency Exchange Association (JVCEA). This entity oversees all operations of virtual currency exchanges in the country.
History of Japanese Crypto Exchanges Being Hacked
2018 was a year which the crypto community experienced prominent crypto exchanges being hacked. The Coincheck exchange- that is headquartered in Japan – lost over $500 Million in NEM tokens due to hackers. Zaif – another Japan-based crypto exchange – lost $60 Million in BTC, MONA and BCH, also to hackers.
Such massive losses prompted the FSA to crack down on cryptocurrency exchanges making sure that the funds of users were in safe hands.
Measures to Protect Customer Funds
JCVEA has proposed several measures to protect both crypto traders and the exchanges. Some of the measures include only allowing 4x leverage on margin trading and setting a limit on the amount of digital assets managed online in hot wallets owned by exchanges. Other recommendations include the cessation of the advertising, promoting or encouragement of speculative trading by crypto exchanges in the country.
What are your thoughts on Japanese crypto exchanges being allowed to carry out self regulation by the FSA? Please let us know in the comment section below.