A team of 16 cryptocurrency exchanges in Japan named as JVCEA (Japan Virtual Currency Exchange Association) has given a detailed proposal to the nation’s financial watchdog. This proposal calls for the making of a self-regulatory organization. According to a media report, the JVCEA was made in March 2018 and was enrolled with the FSA (Financial Services Authority) in April 2018. Now, the agency is planning to be a qualified fund settlement business organization.
This indicates that if permitted, the agency will get the power to apply self-regulatory laws on the cryptocurrency trading market in the nation. This will eventually result in strict industry norms. The 100-page in-progress draft of the proposal summarizes different laws, including timely audits to be carried on for cryptocurrency exchanges. This will be done besides banning trading of particular anonymous cryptocurrencies such as Monero or Dash.
On a related note, JVCEA earlier proposed a restriction on how much investors can have a loan during margin trading. As per the media, the JVCEA has recommended local trading platforms to imply a limitation that investors can only have a loan of maximum 4 times of their deposit. The JVCEA claimed that the projected plan aims to defend local investors since there are presently no market regulations controlling the upper limit of how much investors for cryptocurrency can borrow during margin trading.
As per statistics issued by FSA (market regulator of Japan) in April, there were almost 142,000 crypto investors that were aiming on derivatives last year. This includes a small part of the entire 3 Million traders in the country. On the other hand, more than 80% of the entire trading volume for cryptocurrency in 2017 in the nation originated from derivatives trading. This recorded $543 Billion in 2017 and over 90% of that came from margin traders.