Japan Financial Authority Clarifies Stance on ICOs
The Japan Financial Authority published a statement on Friday on its stand on ICO. The authority initially warned the public about two risks applicable to ICO. The first issued concern was the price manipulation, and the authority went ahead to caution that the price of the token may decline. The also said that the services promised in the ICO white papers may not be fulfilled.
In the statement issued by the Japan Financial Authority: “Invest at your own risk. You should understand there are many risks and the content if ICO project you buy may not be fulfilled. You should be very careful about ICOs.
Laws that may apply in ICOs
Japan has not set specific laws for ICOs, but there are two existing laws that may apply. The laws state that for any business launching an ICO: “ICOs fall under payment services act and financial instruments and Exchange act on how they should be constituted.”
In circumstances when the ICO issued falls under Currency provisions of the Payment services as then the providing company must be registered with the Local Finance Bureau. This is a delegated authority to the prime minister. In instanced when the ICO falls under the investment, and the token is seen as equal to legal tenders it’s regulated by the Financial Instruments and Exchange Act.
Position of ICO in Japan
The popularity of ICOs in Japan is increasing. Both small and large corporations are using the platform to raise money. A good example is GMO which is the countries internet giant which plans to use ICO to sell its 7nm Bitcoin mining boards. Also, Japanese financial services company SBI Group is also launching two ICO business.
Another institution is the Exchange Quoine of Singapore. Quoine is very present in Japan and recently announced that they launched a global ICO called Qash. Quoine is among eleven Bitcoin exchange platforms that were approved by the Japan financial authority I September.
Zaif exchange also launched an ICO platform in August. The company in its launch included a Multilanguage whitepaper, already configured token sale dashboard and blockchain integration services. All these services were “dedicated for you to own your own ICO.”
In other news, many Chinese Bitcoin exchanges are trying to enter the Japanese ICO market. According to Coincheck which is the lead exchange company in Japan, they have received many requests from Chinese startups asking them to list their tokens. This is after a directive by the Chinese government of banning ICOs in the Country.