Self-regulation of cryptocurrencies in Japan: from dream to reality

flop – Japan had entrusted the regulation of the cryptocurrency industry to an association that brings together companies in the sector, including cryptocurrency exchanges major. However, the experiment ended in failure.

Self-regulation of cryptocurrencies: a utopia?

The future will have proved the pessimists right. The Association of Virtual Currency Exchanges in Japan, created following the hacking of the Coincheck exchange in 2018, it would fail in its mission.

The organization, recognized by theJapan Financial Services Agency (FSA), has the power to develop and enforce the regulations governing the Japanese crypto industry.

It is made up of reputable crypto companies such as Coincheck or the Japanese branches of FTX and Coinbase. Despite this mandate and its respectable members, the association would still not be able to convince today.

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Multiple errors were found

The success of this initiative, which has entrusted the regulation to a private body, has left “many people in the world”, doubtful at the time, recalls an anonymous source. This source would be “close to both industry and government” according to the Financial Times.

And it would seem that the old skeptics “might be right”. These claims echo the criticism addressed from the FSA to the association in recent months.

The Financial Services Agency blamed the organization, his slowness in the development of regulations to combat money laundering e management and governance gaps : lack of communication between key actors, vagueness about the decision-making process and responsibilities incumbent on board members, etc.

The defensive argument

The association is therefore inundated with criticism. Another anonymous source, also close to the organization, would also mention it lack of competence and interest from his office, for cryptocurrencies.

The association responded, unsurprisingly, to these attacks. He said he was making the necessary improvements to put an end to these problems. In addition, he also tried to justify some shortcomings.

Masao Yanaga, a professor at Meiji University and a member of the organization’s board of directors, points out a lack of resources to explain the delays

Puts on top of the table, the lack of agreement internationally. It would explain the difficulties in implementing anti-money laundering regulations.

The cryptocurrency industry would therefore not be able to take control of its regulatory fate. The Association of Virtual Currency Exchanges in Japan is struggling to regulate the industry. At the same time, the Financial Services Agency shows its dynamism, create a stablecoin banknote for the country.

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