Japan’s top financial regulator, the Financial Services Agency (FSA) is hard at work trying to figure out how to best regulate initial coin offerings. Besides registration requirements, the agency is apparently considering to revise two existing lows which can also be employed for token sales.
According to a report by Jiji Press, unnamed sources declared:
“The FSA will require business operators that issue their own
cryptocurrencies to be registered with the agency.”
Cryptocurrency operators are required to register with the FSA according to Japan’s amended Payment Services Act. Nevertheless, for now ICOs don’t fall under this act.
According to the original report, the agency intends to submit bills for revising the current laws to the ordinary parliamentary session that’s scheduled for January 2019.
To decide the best path for regulating token sales, the FSA has been holding study group meetings. According to the regulator, ICOs are not banned although many of them are fraudulent. Satis group published a report back in March which claims that 78% of ICOs are scams.
The report from Jiji Press cites unknown sources that stated:
“In view of a number of possibly fraudulent ICO cases abroad, the financial regulator plans to limit individuals’ investment in ICOs for better protecting them.”
The FSA previously explained how two of Japan’s current laws may be applied to ICOs based on their structure even though the country doesn’t have an existing law for ICOs. The regulator has also discussed other areas it intends to regulate on Nov. 28, during the latest meeting on ICO regulation. At that time, the FSA detailed:
“If an ICO has the characteristics of an investment, and the purchase of a token by a virtual currency is practically deemed equivalent to that of legal tender, the ICO becomes subject to regulations under the Financial Instruments and Exchange Act,”.
Disclosure requirements and measures for unfair trades will also be added to the regulation.