Japanese Crypto Space Going the Self-Regulation Route

The two cryptocurrency trade bodies of Japan are planning to unite in a bid to create a self-regulating entity that will govern the country’s digital currency space, insiders familiar with the plan have told CNBC.

The Japan Cryptocurrency Business Association and the Japan Blockchain Association are currently in talks over the details and are slated to finalize their merger as early as April, according to the sources. The new organization is expected to strengthen the local cryptocurrency industry and better protect investors.

One source said that matters under discussion include the appointment of the groups’ respective heads as chairman and vice-chairman of the new body. According to a statement from the Japan Cryptocurrency Business Association, the talks are still ongoing and no final decision has been reached.

This merger plan comes in the wake of the $530 million theft at crypto exchange operator Coincheck in what has been described as one of the biggest virtual currency heists pulled off by hackers.

Inspectors from the Japanese Financial Services (FSA) raided the offices of Coincheck to determine the operator’s preparedness for future cybersecurity attacks and also to monitor its measures for protecting investors. Coincheck has allowed its customers to withdraw yen after submitting a report on the hack to the FSA as part of the conditions to resume its operations.

South Korea exchanges go for self-rule

If the Japanese merger goes through, it will make Japan the second country after South Korea to take the path of self-regulation in the virtual currency space.

Faced with mounting pressure from the government, the Korean Blockchain Industry Association (KBIA) said it was adopting self-imposed rules for the standards of operation of its 14 members as part of its cooperation with the authorities. The self-regulation framework includes verifying investors’ identity through the institution they use as well as requiring of them to register a single account for transactions.

Last month, the KBIA implemented a new verification system while discussing other measures to be introduced later this year.

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