Japan’s two primary cryptocurrency industry groups are merging to form a new self-regulatory entity following the recent $530 million hack of Tokyo-based exchange Coincheck.
The unnamed new entity is set to launch April 1, the Nikkei reports, a year to the day after Japan’s revised Payment Services Act – which recognizes bitcoin as a legal method of payment – kicked in. The self-regulatory body will see the unification of the Japan Blockchain Association and the Japan Cryptocurrency Business Association. The former is notably founded around bitFlyer, Japan’s largest cryptocurrency exchange.
The new entity aims to quickly enforce self-imposed rules surrounding the protection of exchange users’ assets, system downtimes, insider trading and even advertising. Additionally, penalties for breaches will also be considered. All of which sums up to a transparent foray to foster confidence from the public and the conventional financial industry in the cryptocurrency space, particularly in the aftermath of a major hack.
According to the report, talks toward a self-regulatory body were fast-tracked following last month’s infamous hack of cryptocurrency exchange Coincheck, now seen as the biggest cryptocurrency theft ever. A basic agreement toward the unified self-regulatory body on Thursday hinted at bitFlyer CEO Yuzo Kano becoming the body’s vice-chairman at launch.
Under the revised Payment Services Act, Japanese exchanges are mandated to register with Japan’s financial regulator, the Financial Services Agency, to acquire a special license before commencing operations. Exceptions are made for operational exchanges predating the new legislation. Coincheck is a notable example.
The new law also allows registered cryptocurrency exchange operators to form a voluntary self-regulatory body. However, the FSA reportedly refused to allow two separate self-regulatory bodies to operate, thereby leading to the upcoming and newly unified organization.