Japan’s crypto space is getting two new members, as the Financial Services Agency recently gave the green light for two companies to operate. As the financial watchdog announced earlier today, it has recognized the Japan Virtual Currency Exchange Business Association (JVCEA) and the Japan STO Association as self-regulatory groups that will help govern the sale of digital tokens and derivatives in the country.
The FSA’s Eyes and Ears in the Crypto Space
The FSA’s press release explained that both companies are now to be regarded as Certified Financial Instruments and Exchange Associations. At the same time, the JVCEA will also be renamed to the Japan Crypto Asset Trading Business Association (JCATBA).
The JVCEA is the self-regulating body for crypto firms in the Japanese crypto space. The association was formed by 15 member companies, with most of them being crypto exchanges. Its formation was necessitated largely by the hack of local exchange Coincheck, in which the firm lost about $534 million in NEM tokens.
Self-regulation wasn’t so popular at the time. However, the agency did make a point to highlight that allowing government oversight might not be the best option, as government agencies tend to apply excessive controls and can’t move at the same pace.
An unnamed FSA official reportedly said, “It’s a very fast-moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do.”
Strong Moves for Self-Regulation
The FSA eventually certified the association to operate back in October 2018, thus providing it with the power to set rules that will protect customer funds, implement anti-money laundering (AML) standards, and give working guidelines to crypto exchanges.
So far, the JVCEA has refined its scope of operation, explaining on its website that its duty is to ensure the protection and safety of crypto tokens in Japan. The association also works to oversee several crypto-specific areas, including but not limited to Initial Coin Offerings (ICOs).
As for the Japan STO Association, the agency launched last October. Its members include six of the major Japanese brokerage firms – including Rakuten Securities, SBI Securities, and the Monex Group.
The STO is headquartered in Tokyo, and its major task is to help support the development of Security Token Offering fundraising by providing expert counsel. The agency also ensures investor protection and compliance with the country’s laws.
The association is currently chaired by Yoshitaka Kitao, CEO and representative director of SBI Holdings and an executive at crypto giant Ripple Labs.