A document published this November by the Japanese Financial Services Agency (FSA) further clarifies the governing body's stance on cryptocurrency.
The 42-page document contained a section that related to cryptocurrency regulation. As translated, the FSA statement holds that blockchain systems represent a hitherto unseen technology and that a main focus of the organization is to protect traders who frequently use cryptocurrency exchanges. To achieve a satisfactory level of protection, the FSA recommends "daily business management." In that vein, the FSA will continue to monitor the current virtual currency marketplace to better understand the impact it has on traders.
The FSA also discussed crowdfunding through token issuance, saying that it would inform consumers about existing pitfalls. The organization said, "We aim to protect users through alerting attention to ICO risks."
In similar news, the Japanese Blockchain Association (JBA) recently issued guidance to companies that engage in token offerings to Japanese citizens, warning against an unfounded attitude that Japanese laws and regulations do not apply to businesses that crowdfund in Japan from outside the country. The JBA cautions that a lack of "specific regulation regarding ICOs ... is different from no regulation at all as many of the token sales are securities and thus regulated under existing law."
The JBA said internet-based solicitation for token offerings is regulated under Japanese law. It recommended that issuers "shut out all Japanese residents from transacting on their site.”
The JBA included a list of applicable regulations that is extensive but not exhaustive.
Blockchain technology has swung open the doors of a new marketplace and it will take time for regulatory bodies to adjust. While regulators decide how to forge policies, they must continue to balance the interests of the consumers they are charged to protect and those of the businesses they seek to guide toward compliance.