Japan’s Self Regulator to Set Investor Protection Trading Cap

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A new proposal by Japan’s self-regulatory body plans to reduce crypto investor risk by introducing a set of trading limitations.

Known as the *Japan Virtual Currency Exchange Association *(JVCEA), the body has announced its intention to launch a new trading cap according to a report by Japan Times.

Under the soon-to-launch measures, member crypto exchanges will be mandated to set specified trading volume ceilings.

Aimed at investor with small portfolios, the move has the objective of reducing their daily expenses and safeguarding them from sever loss when markets take a turn for the worse.

Trading Cap Restriction Options

Member exchange platforms will have the opportunity to choose from two trading cap establishment options.

The first will be a universal cap of the same amount applied to all investors who fall under the small asset bracket.

On the second approach, the companies will take a more personalized approach, customizing the ceiling for every individual user. The limit will depend on the trader’s age, experience in trading and income level.

Notably also, JVCEA plans to focus on the trading activity of minors so as to set appropriate limits to protect their interest. In this regard, the association will require the confirmation of parents or guardians.

JVCEA has also announced its intention to eliminate the placement of large lot orders, a measure aimed at preventing money laundering.

It is planning to finalize on the regulations in the near future before submitting them to the Japanese Financial Services Agency to get approval.

In the recent past, JVCEA has been continually making strides to regulate crypto trading in the country so as to limit the risk levels associated with the industry.

Last week, it made a proposal to restrict the loan amount usually advanced for margin trading purposes.