Japan’s financial watchdog is considering the development of a regulatory framework for businesses seeking to raise capital through initial coin offerings (ICOs), Coindesk has reported, citing the local media.
According to a recent report by Japanese publication Sankei Shimbun, the Financial Service Agency (FSA) is considering a revision of relevant laws and regulations in order to better regulate digital token sales, which are becoming increasingly popular in the Asian country. The report suggests that at the moment Japan has no regulations that focus on ICOs and that the existing Bitcoin payment law, which came into effect less than a year ago, cannot cover that particular aspect of the cryptocurrency sector.
"There is an increasing demand for amendment of the law, and the FSA is planning to consider suspension of inappropriate ICOs," the publication said, as quoted by Coindesk.
The report also adds that the regulator is already monitoring some ICO projects targeting Japanese investors. Earlier this month, the FSA issued an official warning Macau-based cryptocurrency service firm Blockchain Laboratory. The watchdog said that the company had been offering unregistered services related to digital currency trading and ICOs to Japanese investors.
Assuming that the report is accurate, this means that Japan is set to join countries such as Germany, Switzerland and Austria that have in recent weeks made moves to categorise ICOs and strengthen the relevant regulations. Switzerland’s financial watchdog recently issued new guidelines revealing how it intends to apply financial market legislation to the country’s ICO sector. In them it indicated that it would treat some ICO-issued digital tokens as securities.