New ICO Regulations Due From Japanese Financial Regulator

By Prashant Jha

As per a recent report published by the Japanese news agency Jiji Press on the 1st of December, 2018, the financial regulatory body of the country is all due to come up with a fresh set of regulations to govern ICOs or initial coin offerings. While there are many pros and cons of investing in ICOs, having a strong regulatory backdrop helps in largely eliminating the cons.

The said news outlet cited anonymous sources acquainted with the matter and wrote that the Financial Services Agency or FSA of Japan will henceforth require all those who conduct ICOs and use them to raise funds, will have to undergo a registration process. As per the information gleaned from the cited sources, it seems that the agency is mulling over the idea of introducing bill submissions in the upcoming Parliamentary session next month. Reportedly, the said bills will relate to revision of financial instruments, as well as exchanges and payment services legislations.

Apparently, the slated move comes in the wake of the multiplicity of ICO scams that have rocked the crypto world in the recent times. In fact, there have been a large percentage of ICO scams in 2017. The regulations are expected to serve as a safeguard against the possibility of further scams, in Japan at least. Back in 2017 when the FSA Study Group on Virtual Currency Exchange Industry met, it had put together certain important classifications. The ICO tokens were categorised into the following kinds:

a) virtual currencies not having any issuer
b) virtual currencies having a specific issuer and
c) virtual tokens having an issuer who is legally required to share out the revenue.

While the first two are considered to be under the settlement category, the last comes under investment laws. With new guidelines, more elaboration on these may be expected.