While South Korea goes back and forth regarding their stance on cryptocurrencies, and the United States stays strong with its “do no harm” approach, Japanese regulators have opted to instead work together to self-regulate rather than waiting for Japan’s government officials to weigh in.
A group of sixteen cryptocurrency exchanges based in Japan will create - as early as next week - a self-regulating body in an attempt to protect investors from situations like the Coincheck hack that saw hackers make off with a whopping $530 million in NEM last month.
The original plan to merge two organizations - the Japan Blockchain Association and the Japan Cryptocurrency Business Association - was stalled and is leaning toward forming a new regulatory body to develop regulations for exchanges registered with Japan’s Financial Services Association (FSA), according to sources familiar with the matter.
Earlier in the month, the FSA announced it would be conducting on-site inspections at 15 unlicensed cryptocurrency exchanges in the wake of the Coincheck hack. In addition, the FSA had previously ordered all Japanese exchanges to file reports on their security measures taken to prevent hacks of similar magnitude.
Exchanges do need to take better measures to protect their customers, and regulation is necessary to protect investors in general. The steps this new regulatory body will take are yet to be seen, but since the board is comprised of cryptocurrency exchanges, the regulations should be fair and lenient.