Japan’s Financial Services Agency is set to launch regulations on initial coin offerings, a scheme used mainly by startups to procure funds by issuing their own virtual currencies, informed sources have said.
In view of a number of possibly fraudulent ICO cases abroad, the financial regulator plans to limit individuals’ investment in ICOs for better protecting them, the sources said.
The FSA will require business operators that issue their own cryptocurrencies to be registered with the agency, the sources said.
To introduce the regulations, it plans to submit bills to revise the financial instruments and exchange law and the payment services law to next year’s ordinary parliamentary session starting in January.
Business operators that conduct ICOs post their business plans on the Internet. They solicit investment in the form of existing virtual currencies, such as ethereum, instead of dollar, yen or other hard currencies, and investors receive cryptocurrencies, or “tokens,” issued by the firms in return.