Japan: FSA Recognizes Two Crypto Self Regulatory Organizations
Financial regulators in Japan have officially recognized two crypto self-regulatory organizations (SRO) as Certified Financial Instruments and Exchange Associations. The move marks the latest attempt by Japan to improve its compliance standards of cryptocurrency participants in the country.
Japan Gets Two Crypto SROs
The Financial Services Agency — Japan’s top financial regulatory watchdog — announced the news of the SROs being recognized via a press statement issued on its website on Thursday (April 30, 2020). According to the press statement, the country’s two crypto SROs are now part of the broader group of financial exchange association.
The newly recognized SROs are the Japan Virtual Currency Exchange Business Association (JVCEA) and the Japan Security Token Offering Association (JSTOA). As previously reported by BTCManager, the JVCEA came into existence back in 2018 after the FSA allowed market participants to create an SRO.
In addition to recognizing the new recognition for the JVCEA, Japan’s FSA renamed the association to the Japan Crypto Asset Trading Business Association (JCATBA). Despite the name change, the body will still maintain its original mandate of developing rules for crypto exchanges in the country.
Earlier in April 2020, the JSTOA proposed rules for customer assets and electronic record transfer rights along with a host of other protocols relating to security token offerings (STO). These guidelines were in accordance with amendments made to Japan’s Financial Instruments and Exchange Act (FIEA) expected to come into effect on May 1, 2020.
Indeed, the official recognition for both the JVCEA now renamed JCATBA and the JSTOA by the FSA are part of the new paradigm introduced by the amended FIEA. The move also helps to further improve the standing of crypto commerce in the country within the limits of reasonable government regulation.
FSA Steadily Standardizing Japan’s Crypto Trading Market
Officially recognized SROs are only the latest in a long line of efforts by the FSA to regularize Japan’s crypto trading scene. The Japanese regulator has been working in tandem with the JVCEA to police the country’s crypto exchanges.
From approving crypto exchanges to imposing strict leverage limits for margin trading, the FSA has gone about ensuring the improvement of security and customer protection protocols put in place by market participants. The FSA’s insistence on robust security is a direct fallout from the instances of exchange hacks that saw a massive loss of user funds.