Japan’s Cryptocurrency Exchanges Self-Regulate After $530 Million NEM Theft

A total of 16 registered Japanese cryptocurrency exchanges are establishing a self-regulatory body in April, within months of the infamous $530 million hack of Coincheck.

Japan’s two major cryptocurrency trade outfits are coming together to form a new self-regulatory body that will work with the Financial Services Agency (FSA), the country’s financial regulator, to establish guidelines and investor safety norms among exchanges, the Nikkei reports. The self-regulatory body, currently untitled, sees the coming together of the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA). After agreeing terms last week, the two groups will jointly develop standards for the wider industry.

Notably, the new self-regulatory body will also create and establish guidelines for initial coin offerings (ICOs) in Japan.

The new self-regulatory body confirms a previous report from mid-February to the same end. Through the upcoming entity’s guidelines, the group of sixteen exchanges will focus on avoiding system downtimes, improve protection of crypto assets belonging to customers and curb insider trading, among other objectives.

The new entity will see its chairman in Taizen Okuyama, president of forex trading firm Money Partners Group and current chairman of the JCBA. JBA head and chief executive of Tokyo-based exchange BitFlyer, Yuzo Kano, will serve as the vice-chairman of the new group.

The new self-regulatory body is a transparent effort by Japan’s cryptocurrency industry to foster the public’s confidence in the crypto space in the aftermath of the hack of Coincheck, a Tokyo-based exchange that lost some $530 million in NEM tokens in late January.

If or when approved by the regulator as an authority with regulatory privileges, the body would be able to determine which cryptocurrencies that exchange operators are specifically approved to support and list for trading. Further, the new regulatory body will also have the power to enforce compliance among its sixteen members – all of whom are already registered as licensed cryptocurrency exchange operators.