- Japan’s Financial Services Agency granted approval to the Japan Virtual Currency Exchange Association.
- Experts expect better customer protection and restoration of trust.
Japan’s Financial Services Agency (FSA) approved the self-regulatory status of the cryptocurrency industry, which means that Japan Virtual Currency Exchange Association (JVCEA) is now legally authorized to implement rules and monitor the compliance.
JVCEA was created following a series of high-profile hack attacks on cryptocurrency exchanges that caused massive losses of customer funds. FSA approval will allow the association to establish operational procedures as well as enforce rules aimed at protecting customer rights and preventing money laundering.
“We will make further efforts to build an industry that is trusted by customers,” the cryptocurrency industry association said in a statement following the FSA approval.
Japan was the first country to regulate cryptocurrency exchanges, however serious security breaches forced the Japanese financial watchdog to tighten its approach towards the industry.
“It’s a very fast-moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do,” a senior FSA official said in the interview with Reuters.
Some officials believe that the authorities need to find a balance between strict rules and stimulus to innovation. No one wants to stifle technology development.
Meanwhile, some experts say that JVCEA rules are tougher than the existing legislation.
“The self-regulatory body’s workload is likely to be heavy and there is an issue of whether it can secure enough staff with expertise in crypto exchange business,” according to Yuri Suzuki, a senior partner at law firm Atsumi & Sakai
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