Apparently something good might have come from the Coincheck hack this January. This March, it was originally reported that 16 Japanese crypto-exchange sites would be trying to form a self-regulatory body for the industry.
As of yesterday, this has reportedly come to pass with the regulatory agency in question, being launched. Its primary goals will apparently be to provide ICO guidance to any ICOs that launch in Japan as well as to generally provide guidelines to the industry at large to operate within Japanese law.
It also just so happens that all of the exchanges involved in forming this self-regulatory body were the first to become licensed by the Japanese government. Judging by this, it seems quite beneficial for the industry that they have decided to help future companies navigate the often tricky ground of governmental approval.
Despite this promising implications, possible red flags exist. If one were to look at this in more of a cynical fashion, it should first be noted that this regulation comes from a partnership between the Japanese government and cryptocurrency exchanges. By all appearances, it cannot be self-regulatory because of this.
Furthermore, what exactly do they mean when they hint at guiding all ICOs launched in Japan? If the regulation proves too strong, will it still inspire other governments in a detrimental fashion?
Another possible risk of this proposal is a question that the crypto industry has had since its inception. How does one even regulate something that is supposed to be decentralized at its core?
If you’re not quite familiar with at least this industry’s definition of decentralization, look no further than Satoshi Nakamoto’s white paper that started it all. Decentralization meant no government involvement. Today, it clearly means as little as is reasonably possible. Therefore, one is left wondering: how much control will the Japanese government attempt to take in this growing industry?
The answer remains to be seen as the legislation that’s put forward is explained over time. What is also known at this point is that the Japanese government has attempted to assure the public and the industry that this regulation will have customer concerns at its heart. In any case, it could be reasonably argued that the freedom to innovate needs to be protected.
By: BGN Editorial Staff