While, no doubt Japan became the first country in the world to recognize Bitcoin as a form of legal tender, however, its regulatory system has been quite the roller-coaster ride as it is also the country where arguably two of the biggest hacks in the history cryptocurrency market took place, namely Mt. Gox & Coincheck.
In the latter hack almost saw $530 mln in NEM tokens were stolen, infuriating the Japanese regulators to step in and address security concerns regarding several exchanges in the country.
Significantly regulators are not the only solution opted by the Japanese crypto market to investigate the Coincheck hack.
In a bid to secure their businesses, and also to pass through tougher regulatory pressures, A self-regulatory body has been set up off the backs of the exchanges.
The very first press conference of this body was conducted on April 23rd, where-in all key areas it would be targeting initially were highlighted, a brief revelation regarding its crucial aspects for the future was also given.
Nihon Kasotsuka Kokangyo Kyokai (Japan Cryptocurrency Exchange Association) and is the official name of the body, which currently consists of the 16 exchanges registered with the government’s Financial Services Agency (FSA).
The thought behind this body is for it to raise the bar by setting standards for those exchanges that are currently not registered or up-to-the FSA standards. The body was prompted to adopt these measures as many exchanges still exist which are not registered with the FSA.
However, as the crackdown continues, in order to prove their security, some exchanges have decided to shut their operations rather than modify their operations as per the demands of regulators.
In order to develop a safe trading environment for customers, The FSA has strongly advised cryptocurrency exchanges to establish a unified industry organization and voluntarily figure out a firm set of rules and regulations. Hence the Japan cryptocurrency exchange association (JCEA) was formed. Also to prove the JCEA’s credibility, only those exchanges which are registered with the FSA would be taking charge of this self-regulatory movement.