Based on recent report, the Japanese financial regulator is working on the creation of a regulatory framework for companies raising funds through initial coin offerings in Japan.
According to Sankei Shimbun, the Financial Service Agency is considering the revision of relevant laws and regulations as part of trying to regulate ICOs and token sales in Japan, in light of the growing popularity of token sale activities Japan.
The report indicates that Japan currently has no clear regulations covering ICOs and token sales, while the existing bitcoin payment law that went into effect last April is not sufficient to define the legal status of some ICO activities.
"There is an increasing demand for amendment of the law, and the FSA is planning to consider suspension of inappropriate ICOs and token investment," the report reads.
Since the revised payment services law went into effect in April of last year, Japan has recognized token currency as a legal method of payment. The law also requires crypto exchanges to register with the FSA. It “allows only registered operators, or those that have applied for registration, to operate in Japan,” Nikkei emphasized.
The warning to Blockchain Laboratory will be the FSA’s first under the revised payment services law. “The move is part of the FSA’s more aggressive scrutiny of the activities of unregistered operators in Japan,” the news outlet conveyed, adding that:
The revised law prohibits such unregistered exchanges from operating and soliciting in the country. Currently, there are 16 cryptocurrency exchanges with a license to operate in Japan and another 16 are under review, including Coincheck which suffered a loss of 58 billion yen (~USD$533 million) in a recent hack.
Bank of Japan Gov. Haruhiko Kuroda urged operators of virtual-currency exchanges to enhance security in the wake of last week’s massive cryptocurrency theft.
“Providers of cryptocurrency services need to explain risks to investors proactively and take sufficient security steps,” Kuroda told the Diet Wednesday after Tokyo-based exchange Coincheck Inc. lost about ¥58 billion ($532 million) in NEM coins to hackers.
It is important for the exchanges to gain trust in the “stability and safety” of their settlements and financial services, Kuroda said, adding that Japanese token investors “need to be aware that there are risks in cryptocurrency transactions.”
Japan is the world leader in Cryptocurrency trading and usage.
Be sure to include it in your global strategy.