Japanese cryptocurrency exchanges have reportedly reached an agreement to form an association. The body to be known as the Japanese Cryptocurrency Exchange Association (JCEA) will bring together the 16 regulated exchanges in Japan according to local media reports.
The JCEA brings two entities together – the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA).
The association will set best practices and standards for its members
Taizen Okuyama, CEO, Money Partners is the JCEA chairman of the new association. According to him, the association will advise unregistered exchanges as it seeks to improve industry standards.
JCEA will work to restore confidence and help create a healthy trading environment. “The association is working hard to develop internal controls to govern exchanges. This will also include transaction and advertisement rules,” , the chairman is quoted by Asahi as saying.
JCEA will implement stringent security controls to redeem the image of the industry, the vice president Yuzo Kanei and president of Bitfryer said.
The development comes amid heightened scrutiny from the Financial Services Agency. A spate of hackings in the last one year saw the regulator take a tough stance against cryptocurrency exchanges operating in the country.
A similar high profile attack in 2014 saw the loss of 850,000 bitcoins from Mt Gox. The digital assets were then estimated to be worth $573 million. Mt Gox which accounted for more than 70% of all bitcoin transactions worldwide went bankrupt in the wake of the hacking.
Since January, the FSA has been intensifying its scrutiny, often conducting physical inspections. In March, 6 exchanges were given orders to improve. A few were suspended for one month. At least two have since chosen to close down voluntarily. The FSA requires the exchanges to implement strict security and anti-money controls.