The Japan Virtual Currency Exchange Association (JVCEA) will force its member exchanges to set limits on the trading activity of some clients, as per the latest report.
The self-regulatory body has finally fixed a policy which states that the member crypto exchanges have to set maximum limits on the volumes traded by the exchange’s customers.
This new initiative focuses to prevent investors with “small assets” from suffering great losses and confronting issues with basic daily expenses. The report doesn’t particularly state “small assets” neither has it declared any precise limits to be placed.
As per the report, member crypto exchanges will be provided two options on how to establish trading limits.
The first option intends a universal ceiling which implies determining one fixed max limit for all “small asset” traders. The second option plans a more individual approach by fixing different limits for various customers on the basic factors like investment experience, income, the value of their assets and the age.
The JVCEA likely recommended trading activity restrictions for minors, obtaining an adult’s confirmation in any case of money laundering.
Previously this week, the JVCEA declared its plans to set limits on its member exchanges’ margin trading, likely with the similar plan of preventing customers from heavy losses occurred due to extremely volatile crypto markets.
The JVCEA was established in March 2018 along with 16 other crypto exchanges to build and coordinate rules and policies for assuring security standards for trading cryptocurrencies. The JVCEA was formed just after the hack of Japan-based crypto exchange Coincheck with losses of more than $534 million.
The Association is going to regulate the market by joining hands with the local Financial Services Agency (FSA). FSA has been remodeled lately to enhance its management of fintech-related areas along with cryptocurrencies