The Financial Services Agency has approved the Japan Virtual Currency Exchange Association (JVCEA) as a self-regulatory industry organization based on the Payment Services Act.

The association’s self-regulatory rules include the handling of virtual currencies that are likely to be money laundering and the prohibition of insider trading. The rules apply to the 16 exchange businesses that have been registered with the Financial Services Agency and received certification of self-regulatory organizations. Chairman Taizen Okuyama said at a press conference on the same day, “I will consider user protection as a top priority.”

Based on the certification, the Financial Services Agency will make full registration review of the exchange industry, distribute a questionnaire to traders, and verify business plans, internal control system, countermeasures against money laundering, including accessing and clarifying the review process.

We have seen major changes to Japan’s cryptocurrency landscape in the previous year. A little less than a year ago, Japan’s National Tax Agency released guidelines on computing income from cryptocurrency for income tax returns. In early 2018, Mitsubishi UFJ Financial Group also announced its plans to set up a new crypto exchange for its own cryptocurrency.