Tokyo FinTech
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Tokyo FinTech

New Japan Crypto Rules in Effect from May 1

The Japanese financial services regulator, the Financial Services Agency (FSA) had published a draft of changes to the Funds Settlement Act regarding crypto and security token regulation for public comment from January 14 to February 13. As a result, a total of 398 comments were received from 172 individuals and organizations (77 pages, to be found here).

As a result, revisions have been made as follows, and will come into effect May 1, 2020.

System development related to the crypto asset exchange business

  1. Establish regulations on application for registration of the cryptographic asset exchange business, prior notification of changes in the name of the cryptographic assets to be handled or the content and method of work, etc.
  2. Provisions concerning the operations of the cryptographic asset exchange company, such as the method of displaying advertisements of the cryptographic asset exchange company, prohibited activities, provision of information to users and other measures to protect users, management methods of users’ money and cryptographic assets, etc.
  3. Reduce the threshold for transactions that require confirmation at the time of transaction.

Regulations on derivative transactions and financing transactions using crypto assets

  1. When derivatives and financing transactions using crypto-assets are conducted as a business, regulations on application for registration of the financial instruments business and prior notification of changes in business content and methods will be established.
  2. Derivative transactions and fund procurement transactions using cryptographic assets, such as maintenance of the business management system of financial instruments business operators, etc., advertisement display methods, provision of information to customers, prohibited activities, management methods of customer’s electronic record transfer right, etc. Establish rules for the operations of financial instruments business operators, etc. to be conducted as businesses
  3. Establish requirements for private placement regarding electronic record transfer rights, requirements for submission and exemption of securities reports, disclosure of securities registration documents, etc.

Other

  1. In addition to arranging terms related to “cryptographic assets”, necessary rules will be established regarding investment targets of investment trusts and the scope of business of financial institutions.
  2. Establish regulations on the handling of cryptographic assets in the capital adequacy regulations of financial instruments business operators.
  3. Clarify the points of supervision regarding cryptographic assets and the right to transfer electronic records, and other matters to be noted when applying laws and regulations.

Reference

Original Japanese text: https://www.fsa.go.jp/news/r1/sonota/20200403/20200403.html

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Norbert Gehrke

Norbert Gehrke

Passionate about strategy & innovation across Asia. At home in Japan. Connector of people & ideas.