Cryptocurrency exchanges in Japan self-regulate via the JVCEA. Unfortunately, it seems this governing body is losing two key members. CEOs of both Bitbank and bitFlyer are leaving the JVCEA this week.
The JVCEA Loses Key Members
It is intriguing how Japan can effectively self-regulate the cryptocurrency industry. In other countries, such a system will simply not work. Regulators want to keep their fingers on the pulse, especially where cryptocurrencies are concerned. The Japan Virtual Currency Exchange Association – or JVCEA – takes this role upon themselves with a lot of pride.
As the name suggests, this entity is comprised of officials representing the various Japanese exchanges. That includes CEOs of Bitbank, bitFlyer, Coincheck, and so forth. Unfortunately, it appears two key members will be departing. That is not entirely surprising, as both of the CEOs represent companies under regulatory scrutiny by the FSA.
Both Bitbank and bitFlyer will leave the JVCEA moving forward. It is an unfortunate development, given both companies’ position in the crypto market. However, companies under regulatory scrutiny cannot actively self-regulate in an official capacity. Once the dust settles and both platforms are operating normally again, they may return to this self-regulatory body.
Self-Regulation Will Continue
Although this is a setback, the self-regulation in Japan will not come to a halt. New key members will be named to fill these open positions. Another six exchanges recently received a warning from the FSA as well. That list also includes QUOINE, BTCBOX, and a few other companies. It is evident this industry is being scrutinized but for the right reasons.
This year hasn’t been too great for Japanese exchanges. Coincheck lost $530m in January. Several other platforms have faced attacks as well, albeit no money has been stolen. bitFlyer is on the radar due to a lack of proper internal controls. Moreover, their compliance to prevent criminal activity involving cryptocurrency needs to be improved upon.
In the long run, these developments will strengthen the Japanese cryptocurrency ecosystem. The JVCEA aims to ensure customer funds can be kept safe and secure at all times. As such, scrutiny will need to be a part of life for anyone failing to meet the industry-wide standards. Unfortunately, there are still some platforms not taking this concept too seriously. That will hopefully change in the weeks and months to come.
Do you think the CEOs of Bitbank and bitFlyer did the right thing in leaving the JVCEA? Let us know in the comments below.
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