The 16 licensed cryptocurrency exchange platforms in Japan have decided to come together to launch a self-regulatory body called the Japanese Cryptocurrency Exchange Association (JCEA).
The decision of cooperation between exchanges comes after months of planning between representatives of the various platforms, trying to formulate an acceptable regulatory framework.
According to a report on Asahi Shimbun, a local Japanese media outlet, the 16 licensed crypto exchange platforms have reached a formal agreement to set up the self-regulatory body. The move is seen as a reaction to the increased scrutiny of the country’s Financial Services Agency (FSA) on crypto exchange platforms in the country. By coming together, the participants hope that they would be able to bring sanity to the industry.
Checks and Balances
Part of the coalition will be to institute checks and balances into the Japanese crypto exchange market. Speaking at the formal launch of the Association, Taizen Okuyama, the chairman of JCEA and the CEO of Money Partners, said that the Association will work hard to improve the security infrastructure of crypto exchange platforms in the country. The JCEA will also create rules and regulations that will guide the activities of these platforms as well.
According to Okuyama, ensuring compliance will also be a significant part of the Association’s activities. Defaulters of the JCEA regulations will be penalized for undermining the integrity of the market. The JCEA will also look into the fact that some crypto exchange platforms are operating in the country without an FSA license. The Okuyama-led Association will offer help and advisory services to these unregistered platforms so that they can become registered by the FSA.
Restoring Public Confidence
The January 2018 Coincheck hack that saw the theft of more than half a billion dollars cast a spotlight on the country’s crypto exchange market. The FSA has had these platforms on a tight leash, even clashing with some established names like Binance. The general perception is that of reduced public confidence in the safety of crypto exchange platforms in the country. The lack public confidence and trust is something that Okuyama is determined to change. Commenting on this issue during the launch, he said that the JCEA would strive to eliminate customer concerns and restore public confidence in the market.
Apart from Money Partners, the other members of the JCEA are; Xtheta, Bit Argo Exchange Tokyo, SBI Virtual, GMO Coin, BITOCEAN, Tech BURO, Fiscalo Currency Exchange, Bit Trade, BTC Box, DMM Bitcoin, QUOINE, Bitgate, Bit Bank, BitPoint Japan, and bitFlyer. The JCEA is a merger of two separate groups; the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA).
There have been plans since February 2017 to create a body like the JCEA. Yuzo Kano, the executive director of the JBA, said back then that creating a self-regulatory body would take a while to achieve. Apart from Japan, there is also talk of creating self-regulatory bodies for the crypto market in other countries. BTCManager recently reported that stakeholders in South Korea were closing in on crypto self-regulation. There have also been calls for a similar framework in the U.S.