In line with a recent report ‘published‘, Japan’s FSA [Financial Services Agency] is considering the regulation of unregistered companies that are craving to invest in cryptocurrencies.
The development is reportedly a bid to shut a loophole within the country’s existing regulative framework because of which the unregistered companies which collect funds in cryptocurrencies instead of other currencies remain in the grey zone.
As a result these companies don’t come under the reach of Japan’s Monetary Instruments and Exchange Act which restrain the unregistered firms to collect assets in form of Cash but they fails to mention collected funds in the form of cryptocurrencies.
However, the impetus for reconsidering the present standing of such companies was thrown into relief last fall, as eight men were suspected by Tokyo police who were collecting a sum of around $68.4 Mln in both cash and cryptocurrencies from around half a dozen thousand of investors across forty four prefectures, which included Tokyo too.
In order to elude from their unauthorized operations , the suspects were reckoned to solicit their stake in cryptocurrencies instead of hard cash to evade the regulators of their ongoing unlicensed operations.
As anonymous source, while in an interview with native news outlet ‘Sankei’ that the ongoing operation had been confined to funds in cryptocurrencies, “there was an exception that their game scheme couldn’t [have been] exposed.”
The FSA’s regulative provisions are reportedly aiming to stop the repetition of such instances.
As reported earlier, Japan has been in focus of the industry’s leading crypto hackers till date – like CoinCheck exchange ‘hack‘ that took place in early 2018 and Mt. Gox ‘hack‘ that took place in 2014. Since after this, the regulatory authority FSA has tightened its scrutiny of businesses related to crypto exchanges and has also introduced a risk screening applicants process as mandatory for exchanges seeking regulatory ‘operational licenses‘.
Even earlier this month, 5 crypto exchanges joined the JVCEA [Japan’s Virtual Currency Exchange Association], a self-regulatory body that was formed in April last year  in a bid to determine industry-wide capitalist’s safety standards. The JVCEA has formally been granted ‘self-regulatory‘ status by the FSA, starting from Oct. 2018.
However, the recent moves from the FSA to clarify remaining ambiguities in reference to cryptocurrency regulation embody the watchdog’s thought of placing cryptocurrencies into a new legal class termed “crypto-assets” in the reported ‘hoping that the traders will not purchase them believing them as legal tenders issued by the govt.’
The FSA is additionally set to introduce new ICO [initial coin offering] laws to shield investors from fraud by requiring ‘ICO‘ operators to seek registration with the watchdog, and developing any new token system that will ensure tokens subject to settlement ‘regulation‘.