Japan Financial Services Agency Approves Japan Virtual Currency Exchange Association as Self-Regulating Body for Cryptocurrency

The Financial Services Agency (FSA) of Japan announced that it has approved the Japan Virtual Currency Exchange Association (JVCEA) as a self-regulating body for cryptocurrency based on laws related to financial settlements. The FSA determined that the organization would be efficient in handling money laundering countermeasures and setting up rules for self-regulation.

JVCEA was launched on April 23, 2018 as a self-regulating body in the cryptocurrency industry with the purpose of achieving consistency between cryptocurrency exchange operators. Taizen Okuyama serves as the chairman of the association in addition to his role as President of Money Partners Co., Ltd., a listed company that handles foreign currency margin trading and is registered as a cryptocurrency exchange.

Many companies involved in cryptocurrency are members of JVCEA, including SBI Virtual Currencies Co., Ltd., a cryptocurrency exchange under Softbank Group Corp’s former financial holdings company SBI Holdings; GMO Coin under the GMO Internet Group’s GMO Financial Holdings, Inc.; and Fisco Cryptocurrency Exchange Inc. under the financial information distribution company FISCO Group.

JVCEA is expected to adopt self-regulated rules to handle threats to the legitimacy of cryptocurrency, such as through prohibition of money laundering and insider trading. It will apply these rules to the 16 companies that are members of the association and registered as cryptocurrency exchange operators by the FSA.

According to some media reports, there are currently more than 160 companies awaiting registration by the FSA as cryptocurrency exchange operators, with about 50 companies proceeding with specified measures towards registration. The FSA is aiming to make the registration reviews more efficient, faster, and more transparent, while clarifying the content of those reviews.

JVCEA also provided materials entitled Policies Related to Improving the Environment Related to Statements, etc. on October 24 at the first Experts’ Meeting Concerning Improvement to the Tax Environment held by Japan’s Cabinet Office. The materials listed policy proposals related to filing final tax returns for 2018, such as plans for the National Tax Agency to provide a sheet for statement of accounts for cryptocurrency to individual taxpayers; a policy for the companies that operate cryptocurrency exchanges to provide an annual report that enables customers to easily create a statement of accounts for cryptocurrency sheet for taxes; and a policy to provide transaction history data to customers when requested. JVCEA also made clear that companies that serve as cryptocurrency exchange operators should adopt a policy of disclosure on their websites. JVCEA’s measures towards improving the tax environment are expected to put the efficacy of its self-regulation system to the test. *This article was written by Fisco