Japan's Crypto Currency Markets Start Policing themselves in April.

Japan's Crypto Currency Markets Start Policing themselves in April.

Two trade groups representing 16 registered crypto market operators agreed Thursday to form a new organization, as yet unnamed, that will work with Japan's Financial Services Agency to establish investor safety standards. It will also set guidelines for initial coin offerings, a controversial fundraising method in which virtual tokens are sold to investors.

The trade groups looking to self-regulate, one of which is the Japan Cryptocurrency Business Association (JCBA), represent 16 registered crypto market operators. The market operators will reportedly work together to produce industry-wide investor safety standards, including the creation of guidelines for Initial Coin Offerings (ICO). The group will be able to require compliance of its members, similar to the powers held by the Japan Securities Dealers Association.

If the new group is approved as an independent regulatory body by the government, the organization will be able to prohibit certain virtual currencies from being used by registered crypto operators in the country if, for example, the coins are suspected of being used in money laundering. While waiting for FSA approval, the new regulatory body will be provisionally open to registered operators and exchanges.