A Move Towards a Mature 2019 Market: Japan’s Draft Regulatory Crypto Framework
Japan has been one of the most progressive regulatory regimes for cryptocurrencies. The country is home to many large cryptocurrency exchanges, and Japanese traders were among the major market movers at the height of the bull market.
Japan’s Financial Services Agency (FSA) — the regulatory body overseeing the banking, securities, exchange and insurance sectors — has just released a draft regulatory framework to govern cryptocurrencies and Initial Coin Offerings (ICOs) in the country. This is an effort to increase regulations in Japan’s cryptocurrency industry in the face of some large-scale thefts across some of the Japanese exchanges, concerns around money laundering, and other suspicious activities.
A Progressive Crypto Framework
One of the main features of this new regulation is its focus on security following the hacks at cryptocurrency exchanges such as Coincheck and Zaif. The FSA also wants exchanges to have net assets equal to or more than the amount of currencies on the exchanges in order to protect consumer interests in the event of such hacks in the future.
The report states that ICOs could be subject to securities regulations. The agency notes that the tokens may be governed by the Financial Instruments and Exchange Act or the Fund Settlement Act, according to their structure. In addition, the report covers areas such as self-regulation, crypto custody, ‘deemed’ dealers (entities running cryptocurrency exchanges) and privacy coins, among others. More details can be found here.
The FSA is also considering the option to classify cryptocurrencies under a new legal category called ‘crypto assets.’ This is being done to avoid the common misconception that cryptocurrencies are recognised as legal tender in the country.
That being said, the new classification which bring cryptocurrencies within a legal boundary should inspire investor confidence in Japan and the rest of the world.
Japan has become the first country among the advanced economies to have a detailed legal framework around cryptocurrencies, and it should spark a lot more mainstream interest in the market as we head into 2019!
ICOs in 2019: Regulated Offerings
The regulatory approach taken by countries such as Thailand and Japan indicates that ICOs will increasingly be issued under a proper legal framework in crypto-friendly countries, as we discussed in an earlier post. This should come as great news to genuine token issuers who abide by the local laws. These new regulations will weed out ICO scams, protect investors and provide access to new capital for high-quality projects.
A clear crypto-focused regulatory framework will go a long way in making ICOs a legitimate way to raise capital. These legal frameworks will also pave the way for Security Token Offerings (STO), a more complex financial instrument which will need to account for many aspects of their underlying securities. The year 2019 may just be the start of a mature and regulated token sale market.
On that note, ICOMain wishes all its readers a very Happy New Year!
About ICOMain.io:
ICOMain.io is a full-service solutions provider for all the things needed to complete a successful ICO. Our comprehensive solutions are designed for companies looking to tap into the immense potential of blockchain and launch their ICO in the most efficient manner possible. Our team comprises of seasoned experts who have a wealth of experience in advising ICOs and is complemented by our cutting-edge technology infrastructure. We are dedicated to understanding their clients’ needs who may come from a diverse range of industries. We are also the first sponsor firm for the Gibraltar Blockchain Exchange (GBX) that aims to be a world-leading, institutional-grade token sale platform and cryptocurrency exchange.
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