Head agency for financial regulation in Japan, the Financial Services Agency (FSA) last week released a draft report highlighting their new framework addressing Initial Coin Offering (ICOs) and cryptocurrencies in the country. This report was released after the 11th study group meeting of FSA which contains the recommendation from the previous ten discussions.
Amidst the global regulatory confusion regarding the cryptocurrencies, Japan is among the firsts to come up with a definitive stand for this fresh industry.
Acknowledging the fact FSA states that technological innovation is changing continuously and it understands the necessity of collaboration with others as it reads, “because of this, we urge contributors to sign up for the qualified [self-regulatory] affiliations.”
This year in October, an accredited agency by FSA, the Japan Digital Foreign Money Trade Affiliation was provided with the means to develop regulations for local cryptocurrency exchanges, which tackled the problems of insider trading and money laundering.
These regulations put restrictions on margin trading, derivative transaction and privacy coins.
Commenting on the issue of regulation for ICOs the regulatory body said that particular tokens may come under the radar of regulation depending on their structure. ICOs will be in the purview of the Financial Instruments and Exchange Act.
The report also points to the problem of “deemed dealers,” as many companies are urging people to sign up among which many are unaware that most of such companies aren’t registered under the law. Against this, the report proposes some solutions such as restricting the expansion and onboarding process of new customers until it clears the registration formalities.
As suggested by the local media reports the regulatory draft has little to no opposition in the crypto community.
Earlier, Toshihide Endo, the newly appointed Commissioner of FSA said while speaking with Reuters that the agency has no plan to shut off the cryptocurrency sector, adding, “we would like to see it grow under appropriate regulations.”