What is a self-regulatory organization?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
A self-regulatory organization is an industry body whose members agree to follow rules more detailed than the law itself. In Japan's crypto sector, a certified association screens which tokens may be listed and sets standards for advertising. It fills the gaps the law cannot reach, but its rules remain internal to the industry.
Key points
- Detailed operating rules written and enforced by the industry itself
- They sit between the statute and day-to-day practice
- They cover listing reviews and how services may advertise
- They bind member firms, and in principle only member firms
Definition
An association of industry firms that sets more concrete operating rules within the bounds of the law and supervises its members. In Japan's crypto sector this role is played by a certified association.
Legislation cannot spell out the details of a fast-moving field, so bodies closer to the work write the specifics and members commit to them. In Japan that body is the JVCEA, which publishes its rules as a certified self-regulatory association.
Its scope runs from the review a token must pass before listing, through how services may advertise, to how customer assets are held and what happens during an outage. The shorter listing rosters at Japanese exchanges partly reflect that review process.
That said, these are internal rules for members. They do not reach firms outside the association or services based abroad, and the text is revised over time, so check the association's published rules and the regulator's material for what applies now.
Watch out for
- · The rules cover member firms; they do not protect users of overseas services
- · The text is revised periodically, so read the association's current rules