The self-regulatory Japan Virtual Currency Exchange Association (JVCEA) plans to tighten its customer asset management measures, according to The Japan Times’ report.
JVCEA, a self-regulatory group of some of the largest licensed exchange operators in Japan, was established in April of this year. Currently the organization is reportedly planning to tighten its rules by establishing a limit on the amount of digital currencies that can be managed online by any exchange.
The Japan Times’ sources say that the limit will likely be set at around 10 to 20% of customer deposits. JVCEA is in the process of revising its rules, originally formulated this summer, after which they will be presented for certification to Japan’s Financial Services Agency (FSA).
Usually crypto exchanges store most of their customers’ crypto assets offline on cold storage wallets. However, a certain amount of cryptocurrency is usually stored on a hot wallet that is connected to the Internet, making it vulnerable to potential hacker attacks. JVCEA’s new rules will limit the share of digital assets that can be stored this way by the organization’s member exchanges.
The push for stricter self-regulation comes after the recent hack of a Japanese crypto exchange Zaif that has lost $59.7 million worth of crypto assets belonging to both the company and its customers.
The FSA has launched an investigation shortly after the hack of Zaif, intending to verify whether the company will be able to cover customers’ losses.