Japan’s exchanges have finally formed the self-regulating body everyone’s been talking about for months.
Sixteen of Japan’s cryptocurrency exchanges are forming a self-regulating body to address market issues. The island’s cryptocurrency market is under scrutiny by clients due to two massive breaches that occurred over four years.
After being spoken about for months, the Nihon Kasotuka Kokangyo Kyokai (Japanese Cryptocurrency Exchange Association) was officially formed on Monday by exchanges registered with the Financial Services Agency. Taizen Okuyama, the chairman of this new endeavor, said that its goal is to minimize customer fears and bring forward standards that will help the market flourish.
“We will firmly take measures for [computer] security and in-house management. We will also immediately coordinate trading rules and decide on what advertisement content is appropriate and what information we should disclose,” he said.
The move also appears to be motivated by a desire to ensure that the FSA puts as little pressure on the exchange ecosystem as possible while it continues to grow stronger. Cryptocurrency trading in Japan exploded in 2017, reaching a total volume of over $630 billion for the fiscal year.
Still, a variety of setbacks have made traders anxious. One of these was the moment that Zaif started giving away free Bitcoin for 20 minutes due to a failure in its systems. Yuzo Kano, vice chairman of the JCEA, said that this could be counteracted with stronger cybersecurity practices.
“As financial service operators, we will increase our awareness. We will aim to take security measures that are stricter than before,” he said.
This is easier said than done. Cryptocurrency-savvy software engineers are in short supply in Japan, making the situation dire when it comes to facing the threat of another major breach.
As cryptocurrency giants on the island grow larger, they also become attractive targets. Preventing this will take much stronger security, but one still needs the manpower to create these measures.
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