Japanese cryptocurrency exchanges have formed a self-regulatory organization (SRO) to regulate the virtual currency market in order to regain public trust by providing improved safeguards for investors and traders.
According to a local news outlet Asahi Shimbun, sixteen licensed cryptocurrency exchanges currently registered with the Japan’s Financial Services Agency (FSA) have signed a formal agreement to form an SRO called Nihon Kasotsuka Kokangyo Kyokai or Japan cryptocurrency exchange association (JCEA).
JCEA will set compliance standards for the cryto exchanges to operate, to be adhered to by all member exchanges.
The SRO will also advise the remaining crypto exchanges in Japan, not registered with the FSA to do the needful at the earliest. There are some unregistered “deemed” crypto exchanges that were allowed to operate.
Japanese cryptocurrency exchanges have been under the scanner after one of the biggest-ever cryptocurrency thefts in January at Coincheck, which is an unregistered, “deemed” crypto exchange. The exchange lost $530 million in digital money when hackers stole NEM coins from its wallet.
Japan, one of the world’s most cryptocurrency-friendly nations, is among the first countries in the world to implement a registration system for cryptocurrency exchanges. It has already made digital currencies legal tender way back in April 2017 when the virtual currency market was starting to boom.
The government had implemented a rule in April 2017 that required cryptocurrency exchanges to register with the government. While there are 16 registered as of now, roughly the same number is waiting for approval.
However, the recently strengthened norms prompted some exchanges to withdraw their request for registration. About a 100 firms are reportedly interested in entering the Japanese crypto market.
In mid-February, Japan’s two cryptocurrency industry bodies – the Japan Blockchain Association, and the Japan Cryptocurrency Business Association – had agreed with the FSA that only registered exchanges could function. The two bodies also formally proposed a merger to form an SRO that was to be launched in April.
Meanwhile, Internet entrepreneur twins Cameron and Tyler Winklevoss had in mid-March mooted the idea of launching a SRO for the U.S. virtual currency industry, which they said is the “next logical step in the maturation of this market.”
by RTTNews Staff Writer
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