Sixteen registered cryptocurrency exchanges in Japan are preparing to set up a self-regulating body in a bid to regain public trust following the US$530-million cryptocurrency theft in January, The Nikkei reported Feb. 21, citing an executive from one unregistered operator.

The proposed regulatory body will seek to create fair trade rules and use self-regulation to plug loopholes in the law. Further, it will detail its policy on issues like insider trading, advertising and security, and lay down penalties for members who do not abide by the guidelines.

Taizen Okuyama, president of foreign currency trading service provider Money Partners Group Co. Ltd., is likely to be chairman of the new entity, while Yuzo Kano, CEO of cryptocurrency marketplace operator bitFlyer, is likely to serve as its vice chairman.

Earlier in February, the Japan Blockchain Association and the Japan Cryptocurrency Business Association agreed to merge and establish a self-regulatory body to better protect clients' assets and system risks. However, the plan has been scrapped after talks stalled in favor of the new body to regulate exchanges registered with the country's Financial Services Agency, Reuters reported Feb. 20.