The suggestions shared by Japan Virtual Currency Exchange Association (JVCEA) are aimed at preventing a repetition of theft and hacking incidents
A group of 16 Japanese cryptocurrency exchanges - Japan Virtual Currency Exchange Association (JVCEA) - have presented a detailed proposal to the country’s financial regulator, calling for the formation of a self-regulatory organisation.
As per a report by CoinDesk, the JVCEA was formed in March and was registered with the Financial Services Authority (FSA) in April. Now the group is aiming to be a 'certified fund settlement business association.
This means that if approved, the group will get the authority to impose self-regulatory rules on the country's cryptocurrency trading market, which would eventually lead to stringent industry standards.
The 100-page working draft of the proposal outlines various regulations, including regular audits to be conducted for cryptocurrency exchanges, apart from prohibiting trading of specific anonymous cryptocurrencies like Dash or Monero.
The JVCEA had also recently expressed its interest in limiting the extent of borrowing allowed in margin trading. It said that trading with borrowed money should be restricted to a maximum of four times of the investor's actual deposit.
Japan's FSA itself, has been instrumental in cracking down on the cryptocurrency industry, with detailed inspections and observations of what licensed cryptocurrency exchanges are doing.
The suggestions shared by the JVCEA in its proposal, are also aimed at preventing the repetition of fraud or theft incidents related to cryptocurrency, such as the Coincheck hack, which saw a loss of USD 533 million from the exchange's digital wallets.This proposed move by the JVCEA, will also help FSA’s mission, as it has been working extensively to ensure that cryptocurrency businesses are improved and enhanced with better internal auditing, apart from safeguarding the user’s assets.