- Japan will reportedly release new regulations for ICOs in January 2019
- This comes just as Singapore has released theirs which aim to combat money laundering and potential fraud
- Japan’s decision was inspired by recent ICO mishaps in the United States
It has been reported that Japan’s financial regulator will be introducing new Initial Coin Offering (ICO) regulations.
These regulations are designed to protect investors from potential fraud, a hard-hitting subject that has plagued the industry in the United States and the rest of the world.
One of the key aspects of these regulations is the requirement that firms that conduct ICOs must register with Japan’s Financial Services Agency.
Other aspects of these new regulations will involve financial instruments, exchanges and payment services and the draft of the document will be submitted to the ordinary parliament session in January.
One of the motivations for these new regulations is “in view of a number of possibly fraudulent ICO cases abroad” as a way “to limit individuals’ investment in ICOs for better protecting them.”
This comes as no surprise as the SEC has found themselves having to shut down a number of unregistered or fraudulent ICOs this year. It seems Japan is taking a cue from this and wants to end the problem before it starts.
Japan isn’t the only country that is giving concrete guidelines on ICOs.
The Monetary Authority of Singapore has released their own guidelines for businesses that want to launch ICOs in the country.
Previously, tokens were subject to the same laws as shares, debentures, business trust units, and securities-based derivative contracts.
Now, it seems that some tokens are exempt from this. Exempted tokens include ones that are worth less than $3.6 million, tokens that are to be distributed to less than 50 investors and those distributed among institutional investors.
Individuals and firms subject to these laws are those who are involved in the production of tokens, the management of token selling exchanges and those who provide financial advice for the selling of tokens.
Owners of toke exchanges must hold a MAS licensee and financial advisors must hold a financial advisory license from the FAA.
Token operators are also required to comply with anti-money laundering obligations such as reporting suspicious activities to the authorities and not doing business with known terrorists.