Japan’s Financial Services Agency (FSA) has officially given a self-regulatory status to a local group of crypto exchanges, industry website Coindesk has reported.
The FSA issued a statement earlier today, saying that it had accredited the Japanese Virtual Currency Exchange Association (JVCEA) as a “certified fund settlement business association”. This will allow the JVCEA to set rule for local crypto exchanges and take action over any violations.
The JVCEA was created earlier this year, in response to a high-profile hack that resulted in the theft of around $530 million of cryptocurrency from Japanese crypto exchange Coincheck in January. The incident prompted the 16 licensed Japanese crypto exchanges at the time to join forces in an effort to create better standards for the local crypto exchange sector. The association applied for approval with the FSA in August.
The JVCEA has seen its fair share of challenges since its inception. In June, Yuzo Kano and Noriyuki Hirosue, chief executive officers of major crypto exchanges bitFlyer and Bitbank, respectively, stepped down from their roles as vice presidents of the organisation, after the FSA issued business improvement orders to their platforms. In addition, last month about $59 million worth of digital coins were stolen from JVCEA member Zaif. The exchange’s parent company, Tech Bureau, was forced to strike a deal with Fisco Digital Asset Group, which provided the capital needed to cover users’ losses, in exchange for a majority stake in Zaif’s owner.
The FSA today issued a separate statement, revealing that it had seen a growing number of companies expressing interest in becoming licensed crypto exchange operators in Japan. As a result, the financial watchdog has updated and released the documents it requires for firms seeking to be licensed, Coindesk reports.
One of the companies pursuing a crypto exchange licence with the FSA is Coinbase, the operator of the largest crypto trading platform in the US. Coinbase recently expressed confidence that it would obtain the licence in 2019.