Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The new guidelines mandate local companies to register with the FSA before launching their ICO digital tokens in the market.
Japan’s topmost regulatory body – Financial Services Agency (FSA) – is working to bring new regulations for Initial Coin Offering (ICO), says local news report JIJI. Citing “informed sources”, the publication says that the new regulatory measures are to protect investors from fraud.
Just like the U.S. SEC asks the local U.S. companies to register themselves before conducting the ICO, the FSA also makes registration mandatory for local Japanese companies to raise funds through ICO. To bring the new regulatory measures in action, the FSA will first need to submit the bills during the upcoming parliamentary session in January 2019.
JIJI says that the new regulations come “in view of a number of possibly fraudulent ICO cases abroad” as a way “to limit individuals’ investment in ICOs for better protecting them.” Note that these new regulations not only impact local companies operating in Japan but rather reduces the overall exposure of Japanese investors to the ICO market in general.
ICO Market Regulation – A Global Scenario
Note that the regulatory step in the ICO market is not just limited to Japan. Several other countries have initiated regulatory stand at the end after multiple fraud and scam cases coming out of the global ICO market this year. Today itself, CoinSpeaker reported how the crypto-friendly Asian nation Singapore updated its ICO guidelines to deal with issues of terror-financing and money-laundering.
The issuance of the latest guidelines provides an overview of the securities laws which are currently administered by Singapore’s central bank – the Monetary Authority of Singapore (MAS). Last month in November, the MAS introduced a new Payment Services Bill (PSB) which also includes the updated securities guidelines. It reads:
“A person carrying on a business of providing any service of dealing in digital payment tokens or any service of facilitating the exchange of digital payment tokens must be licensed and will be regulated under the PSB for AML/CFT purposes only and will be required to put in place policies, procedures and controls to address its AML/TF risks.”
On the other hand, South Korea has been again open to revise its stand on ICOs and legalize the market after introducing an outright ban last year in September 2017.
France has plans to become Europe’s ICO hub, and with such a view the French authorities have accepted the legal ICO framework drafted in early 2018. The framework provides safeguards and guarantees to investors.
Last week, chairman of the U.S. SEC- Jay Clayton spoke on the long-debated issues of treating ICO tokens as securities. “If you finance a venture with a token offering, you should start with the assumption that it is a security,” he remarked. Clayton also had a word of advice for companies pitching tokens to investors. “If there’s a gap between what you’re telling [the SEC] and what you’re telling people investing in your venture, that’s not a good place to start.”