thecoinrise.com
The self-regulation plan by Japan is reportedly not working as intended. As per the reports by local media channels, local government, and industry experts, the self-regulation entity of the country, the Japan Virtual Currency Exchange Association (JVCEA), has been responsible for developing regulations for the country’s crypto market.
A report by Financial Times says that the current system of crypto regulation, according to an unnamed source “close to both industry and government.”
Japan FSA founded JVCEA after the Coincheck hack
The organization was created back in 2018 in reaction to the $530 million Coincheck exchange hack. It is empowered to enact and implement regulatory frameworks for regional cryptocurrency exchanges and is recognized by Japan’s Financial Services Agency (FSA). Several well-known local cryptocurrency companies, like Coincheck, BitFlyer, and Rakuten Wallet Co., as well as the Japanese branches of FTX and Coinbase, are among its members.
The JVCEA apparently received quite a bit of criticism from the FSA in recent months for its slowness in establishing regulation.
The report claims that the FSA has outlined important problems with the JVCEA, including its failure to implement anti-money laundering (AML) regulations on deadline and its secretariat’s failure to communicate with directors and member companies, both of which indicate poor management.
The report went on to add that it was unclear “what kind of deliberations the body was having, what the decision-making process was, why the situation was the way it was, and what the responsibility of the board members was” and that the FSA had previously issued an “extremely stern warning” to the JVCEA in December to get its processes under control.
In June, Prime Minister Fumio Kishida urged the organization to expedite the process for listing digital assets on regional crypto exchange platforms while remaining “mindful of the need to protect users.”
Notably, in December, FSA in Japan said that it would follow the methods of the U.S. regulator for stricter stablecoins laws, as TheCoinRise reported.
Moreover, in April, the Bank of Japan (BOJ) urged G7 nations to adopt a common crypto regulatory framework.