Japan’s top financial regulator discuss how to best regulate initial coin offerings and plans to amend two existing laws that can be applied to token sales.
Japan’s amended Payment Services Act requires cryptocurrency operators to register with the FSA. However, currently, ICOs are not covered within the scope of this act. Some ICOs will be regulated under the Financial Instruments and Exchange Act.
The regulation will also include disclosure requirements and measures for unfair trades. In addition, distribution channels will be regulated and token issuers will be screened to ensure adequate financial health.
“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,” the regulator previously explained.