More Japanese Crypto Exchanges to Self-Regulate
Five cryptocurrency exchange operators, including Coincheck, have registered to self-regulate in accordance with Japanese law. They have joined the self-regulatory association which, until now, has only accepted the regulated cryptographic exchanges as members. According to Japan’s main regulator, companies seeking to register their exchanges in the country must comply with self-regulation standards.
The Japan Virtual Currency Exchange Association (Jvcea), currently the only self-regulatory organization (SRO) in the Japanese cryptocurrency space, announced on Friday that five cryptocurrency exchange operators have joined the association.
The Jvcea was approved as an SRO in October by Japan’s top financial regulator, the Financial Services Agency (FSA). Prior to Friday, the only members of this association were the 16 regulated cryptocurrency exchanges in Japan.
Out of the five new members, three are deemed dealers which are companies that have been allowed to operate crypto exchanges in Japan while their applications are being reviewed by the FSA. They are Coincheck Ltd., Everybody’s Bitcoin Co. Ltd., and Lastroots Inc. Coincheck is a subsidiary of Monex Group; the popular exchange was acquired after it was hacked in January. Everybody’s Bitcoin has been acquired by Japanese e-commerce giant Rakuten.
The other two new members, Lvc Corp. and Coinage Corp., are not yet registered with the FSA and are currently not allowed to operate crypto exchanges in Japan.
Lvc Corp. oversees cryptocurrency and blockchain business units of Line Corp., the operator of Japan’s most popular chat app, Line. In July last year, the company launched a crypto exchange called Bitbox globally except in the U.S. and Japan due to regulations; the exchange is not yet registered with the FSA. Coinage Corp., established in October 2017, is a subsidiary of United Inc., a Tokyo Stock Exchange-listed advertising company. According to its website, Coinage is engaged in “virtual currency transaction-related business.”
In an exclusive interview last week, the FSA detailed what it expects from self-regulation of cryptography. The agency also recently published its final report describing the proposed rules for cryptography service providers.
It is expected that the operators of cryptographic exchanges follow the rules established by the SRO, regardless of whether they are members of the organization. The agency emphasized that the registration of members who are not members of the SRO who have not established internal rules equivalent to the rules of the SRO can be rejected or canceled.
Jvcea is expected to cooperate with the FSA to instruct and supervise its members to properly operate their businesses, including improving the security of their systems. The association is also expected to “establish detailed wallet management processes from the point of view of system security and cross-sectoral rules in areas that are not covered by laws / regulations, for example, margin trading, for the user protection, “Japan’s main financial regulator described.
In addition, the FSA said last week that more than 190 operators have expressed interest in entering the Japanese cryptography market.
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