Citing anonymous sources close to the newly planned group, Reuters is now reporting that sixteen Japanese cryptocurrency exchanges are drawing plans to install a self-regulating body as early as next week.
This new plan is to fast-track a self-regulatory body to better secure investors, in particular due to the recent hack of Tokyo-based exchange Coincheck where over $520 million in NEM tokens was stolen less than a month ago.
These anonymous sources have also stated that a previously reported plan to combine two of Japan’s cryptocurrency industry units, the Japan Blockchain Association and the Japan Cryptocurrency Business Association, in order to form a single self-regulating entity have now been trashed after talks dropped to merge these two entities. Rather, the new self-regulating body will be registered with Japan’s Financial Services Association, the country’s sole financial regulator.
While specific details of the new entity seem scarce it is more than likely than not that the sixteen exchanges behind the nearly-launched entity are the sixteen currently licensed crypto exchanges registered with Japan’s Financial Services Association.
Following recent legislation of the edited Payment Services Act in April of last year cryptocurrency exchange operators need to be licensed by the regulator.
Exceptions on a provisional basis are allowed however – particularly if operational exchanges predating the new legislation exist – of which Coincheck is a clear example.
In September of last year, Japan’s Financial Services Association granted licenses to eleven crypto exchanges so they could operate in the country, a number that has since jumped to sixteen according to recent reports given to CBNN.
In the interim, Japanese authorities continue their investigation into last month’s high profile theft of Coincheck while that exchange’s operators continue to assure NEM account victims of refunds.
The heist has now led to Japanese regulators beefing up criticism on the industry with in-person inspections targeting sixteen unregistered cryptocurrency exchanges.