Japan FSA Details New Regulations To Govern ICOs

Regulators in Japan are ramping up the fight against illegal activities in the cryptocurrency space. The country’s top financial regulator is in the process of unveiling a new set of regulations that will govern the process of carrying out Initial Coin Offerings.

ICO Regulation

Japan Financial Services will require all business operators to register with the agency before carrying out an ICO. The new set of regulations should become clear early next year. The regulator is in course to table a new bill detailing the new regulations in parliament in January.

A push to come up with a new set of regulations comes on growing concerns about fraudulent ICO’s. Recent studies have shown that as many as 80% of the ICOs carried out last year, were fraudulent in one way or another.

Funding of coins and tokens through ICO clocked record highs of $11.9 billion last year. However, the fact that most of the projects have gone under with investors’ money has not gone well with regulators around the world.

Business operators, as well as developers, normally post their plans online as they seek to raise money through ICOs. A lack of background checks on such projects has left most people at risk of losing invested funds, as there are usually no control measures.

Setting out a new set of regulations is seen as the only way of ensuring only legitimate ICO see the light of day. The new regulations should also go a long way in protecting the interest of investors should anything go wrong.

Japan Crypto Regulation

Japan is one of the countries that has upped the tempo when it comes to the regulation of the cryptocurrency sector. The country’s regulators swung into action early this year when Coincheck exchange experienced a significant security breach. The breach resulted in the loss of $500 million worth of tokens after a hack attack.

In the recent past regulators in the island nation have taken the fight to cryptocurrency changes.  Some exchanges have had to close shop on failing to put in place sufficient security measures to protect investor’s money. Some have had to contend with temporary shutdowns as they work on upgrading their systems.

While most people have cried foul over increased regulation, it remains the only way of bringing sanity into the sector.  Increased regulations should go a long way in averting the possibility of people using cryptocurrency for illegal activities such as money laundering and the financing of terrorism activities.