Japan’s cryptocurrency self-regulator tightens digital assets management rules to prevent hacks
|- JVCEA plans to limit the portion of assets managed online.
- The decision is made following Zaif heist.
Japan’s self-regulating body for cryptocurrency operators will tighten up self-imposed measures to enhance investor protection in wake of hack attacks and security issues that led to customers’ money loss.
The Japan Times reports that the Japan Virtual Currency Exchange Association (JVCEA) will revise the rules for managing customer funds to impose the limit on the amount of digital coins managed online by 10-20% of the total amount of customer deposits. The new rules will come into force once they are approved by the Financial Services Agency.
The latest heist happened in the end of September. The thieves stole 7 billion yen worth of digital coins from another Japanese exchange Zaif that belongs to Osaka-based startup Tech Bureau. About 4.5 billion yen of the stolen money belonged to Tech Bureau’s customers. This money was managed online, which made it an easy picking for hackers.
Back in January Coincheck, a major exchange, lost 58 billion yen of customer funds in NEM coins stolen by the hackers. These assets were also managed online.
While cryptocurrency exchanges store a large amount of customer funds offline, they have to keep some portion of the assets online so that they can be easily available for transactions.
JVCEA represents the interests of 16 FSA licensed cryptocurrency operators. The self-regulating body was created to rebuild public trust in crypto industry following Coincheck heist.
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