Work Of Crypto Investment Firms To Be Regulated In Japan
The Financial Services Agency of Japan (FSA) is considering the issue of regulating the activities of unregistered companies attracting investments in the crypto sphere, Cointelegraph Japan reports.
Thus, the Japanese regulatory organization seeks to fill a gap in the legislation of the state, where investment companies, attracting funds in cryptocurrency, and not in fiat, continue to remain in the “gray zone”. This situation exists because these firms are not subject to the Law on Financial Instruments and Exchanges, which explicitly prohibits unregistered companies from attracting investments in cash, while funds in cryptocurrency are not mentioned at all.
The events of the fall of 2018, when the Tokyo police arrested eight people suspected of creating a financial pyramid, were a boost to consider this situation. Acting fraudulently, they managed to raise $68.4 million in cash and cryptocurrencies from 6000 depositors in 44 prefectures of the country, including Tokyo.
During the investigation, it turned out that the pyramid organizers urged investors to make deposits in cryptocurrency, thereby trying to avoid responsibility under the law. The current actions of FSA are aimed at preventing such incidents.
Japan has a long history of fraud and hacker attacks related to crypto exchanges. The most famous cases are those involving Mt. Gox in 2014 and Coincheck in early 2018. Consequently, the regulatory financial institutions of Japan and law enforcement agencies began to pay increased attention to the crypto sphere, and the country now occupies a leading position in the world in terms of regulation.