Japan to implement new regulations on IEOs
Japan’s Virtual Currency Exchange Association (JVCEA), the organization approved by the Financial Services Agency to govern cryptocurrency businesses, has issued a new document titled Guidelines on Regulations Pertaining to the Sale of New Cryptocurrencies. All cryptocurrency exchanges registered with Japanese authorities are members of the JVCEA. The regulations are expected to have an impact on initial coin offerings (ICO) and initial exchange offerings (IEO) in Japan.
Earlier in June, the Financial Services Agency released operational guidelines for cryptocurrency exchange operators with a lengthy postscript on ICO-related businesses.
The operational guidelines present information on the necessity to disclose details such as - if token sellers are also the token’s issuers, whether “issues such as the eligibility/potential for realization of the business and the suitability of the token will be rigorously examined and validated.”
They also present information on whether “appropriate regulations are in place related to examining issues for judgement of not only the eligibility/potential for realization of the business and the suitability of the handled token, but also the financial status of the issuer and the propriety of selling other tokens, and whether a scrupulous examination of substance can be carried out” in the event that sales are carried out on behalf of the token issuer.
The ICO market declined significantly after 2018 due to the failure of many fraudulent ICO projects. However, IEOs, which are conducted by cryptocurrency exchanges that have already been approved by regulatory authorities for the sale of new cryptocurrencies have been a global trend in 2019 following several successful IEOs on the Binance Exchange.
The guidelines published by the JVCEA allow authorities a higher degree of visibility over exchange activities for those businesses seeking to conduct IEOs.
OhNoCrypto
via https://www.ohnocrypto.com
Masayuki Tashiro, Khareem Sudlow
