Akihisa Shiozaki, a Japanese lawmaker who played a role in the development of the country’s cryptocurrency regulations, has called for greater transparency in the industry following the collapse of FTX.com.
Investors were not warned about the risks associated with the bankrupt exchange’s native cryptocurrency, FTX Token (FTT), by the Japan Virtual and Crypto assets Exchange Association (JVCEA), the self-regulatory body that oversees local crypto exchanges, according to Shiozaki in an interview with Bloomberg.
FTX Japan listed FTT and began offering FTT trading pairs on its platform in February 2022 after the token was approved by JVCEA, but the association also required FTX Japan to monitor the FTT holding balance of its parent company’s trading arm, Alameda Research.
The poor disclosure and management of Alameda’s large FTT holdings led to the rapid downfall of FTX in early November.
Despite the FTX collapse, Shiozaki believes that Japan should relax its strict screening process for token listings.
JVCEA is reportedly considering easing its lengthy screening process to allow tokens that have previously been traded in the local market to be listed on exchanges.