|Mar 02, 2018 08:08 PM||By: Guest Author | 11118 Views|
16 registered Japanese digital asset exchanges have merged to form a new body, directed at spontaneous self-regulation and uniform patterns across the business. “Virtual currency” trading has expanded in the world’s third-largest economy over the past year, as higher corporate and government inspection have taken the technology mainstream.
The new body, which hasn’t been formally named yet, was introduced a press conference in Tokyo on Friday afternoon by two of the industry’s most prominent spokespeople: Money Partners representative director Yasunori Okuyama, and bitFlyer CEO Yuzo Kano. Okuyama and Kano will become the chairman and vice chairman of the new body respectively.
“This is a turning point, where the industry grows one,” stated Kano, assigning to the various political lobbying groups that have expressed businesses over the past few years.
As TechCrunch Japan stated, it strives to be a self-regulating body, approved by Japanese regulator the Financial Services Agency (FSA). Although it would originally be made up of already-registered exchanges, organizations seeking official operating licenses could participate in the future, Okuyama announced.
The FSA began handing out official licenses to digital asset exchanges in September 2017. They combined Money Partners, QUOINEX, bitFlyer, (Zaif), Bitbank, GMO Coin, BTCBox, BitTrade and BitPoint. A new law passed in April 2017 requires “virtual currency exchanges” to obtain the certification in order to remain operating.
Since then, there has been private grumbling from some industry members that the government was becoming too heavy-handed and intrusive in its regulation. Exchange users have been made to perform detailed questionnaires about their identities, trading activities, occupations and incomes — under threat of having their accounts suspended for not complying.
The law’s primary intent was for the industry to self-regulate. However, that has also been uncertain, with companies breaking to form rival bodies.
Advocacy group Japan Authority of Digital Asset (JADA) started as far back as 2014 to lobby for proper government regulation in the wake of the Mt. Gox debacle earlier that year. JADA later morphed into the Japan Blockchain Association (JBA) which battled for attention with the Japan Cryptocurrency Business Association (JBCA).
The new body will complement, rather than replace, the two others — which will remain operating with their respective members rather than merging, as stated previously.
The news comes just weeks after a major hack at Japanese digital asset exchange Coincheck, which saw a huge USD 500 million worth of NEM tokens disappear from “hot” wallets.
TechCrunch reporter Akio Hoshi asked Kano if self-regulation would be sufficient at stopping similar hacks in the future. He responded that the Coincheck incident still isn’t completely understood, but measures like multi-sig and cold wallet storage should be performed by all, as well as selection of existing security standards like the credit card industry’s PCI DSS.
Other self-regulatory rules would likely concern employee conduct, promotion standards, anti-money laundering and counter-terrorism financing, plus order book and compensation rules.
Cryptocurrency and digital asset trading has expanded in Japan since the start of official regulation last year. JPY is now one of the most-used fiat currencies for crypto trading, and researchers have proposed middle-aged Japanese men are the world’s largest crypto trading demographic.