According to the Japanese Newspaper Sankei Shimbun, Japan is inching closer to regulating ICO’s. Japan’s Financial Service Agency (FSA) is considering making revisions to existing laws and regulations to make the current legislation relative to the cryptocurrency industry – more specifically, ICO launches.
The consideration comes shortly after Japan issued a number of risk warnings regarding ICO’s. According to Sankei, ICO’s have become a popular way to quickly obtain project funds in Japan. However, Japan’s FSA has noticed that there are a number of overseas ICO projects that have turned out to be fraudulent. In October 2017, the FSA issued an Initial Coin Offerings (ICOs) Risk statement, warning investors that,
The price of a token may decline or become worthless suddenly...there are possibilities that the projects in the paper are not implemented, or the goods and services planned are not offered in reality
On February 13, Japan issued a warning to Macau based cryptocurrency exchange Blockchain Laboratory, warning the company that if they are interested in selling securities in Japan (offering their exchange services in Japan), they must register under the Financial Instruments and Exchange Act. According to the February 13th statement issued by the FSA, the FSA has warned Blockchain Laboratory to stop offering unregistered securities several times, however, Blockchain Laboratory never responded to the warnings.
Legislation
Currently, there are no laws in Japan that clearly define ICO’s. The FSA believes that the current Financial Instruments and Exchange Act is not detailed enough to have authority over the cryptocurrency market. The FSA reports that as cryptocurrency is becoming more popular, there is an increasing demand for amendments to be made to the Financial Instruments and Exchange Act to include cryptocurrencies. Japan considering making amendments to the current Financial Instruments and Exchange Act supports a recent trend in cryptocurrency. Recently, countries have been discussing how they should approach cryptocurrency regulation and there has been a number of self regulating bodies created to establish legal frameworks. Companies in the cryptocurrency industry have also been anticipating the creation of government regulation. Just yesterday, Thai cryptocurrency exchange TDAX suspended the trading of new ICO’s on their exchange for two weeks; TDAX has postponed the trading of the new ICO’s until March 8th when ICO regulation and a fintech bill is supposed to be released by Thailand's SEC.
Valeria Blokhina
Yuri Molchan
Dan Burgin
Alex Dovbnya