Japanese Business Group Submits ICO Legalization Guidelines to the Government

Apr 07, 2018 at 4:34

A government-backed working group in Japan has proposed guidelines in legalizing and regulating initial coin offerings (ICOs) in the country.

In a report published by Japan’s ICO Business Research Group, calls were made for the government to legalize ICOs and adoption of clear industry rules and practices to encourage growth as well as protect investors of the industry.

“ICO is still in its infancy and has no industry practices yet… Appropriate rules must be set to enable ICO to obtain public trust and to expand as a sound and reliable financing method,” the group expressed.

It can be noted that ICO Business Research Group has members which include lawmakers, academics, bankers as well as the chief executive of bitFlyer, Japan’s largest cryptocurrency exchange.

Under their proposed guidelines, ICO operators would be required to perform KYC verification on all contributors aside from providing disclosures to ICO contributors and other investors before starting offerings. Operators are also expected to update investors and contributors on the milestones of the project to weigh whether it is sticking with the roadmap laid out in its whitepaper.

However, ICO Business Research Group’s report mentioned that regulators may have to adopt more detailed rules in the future, including regulations designed to restrict or encourage certain types of ICO structures.

According to a Bloomberg report, Japan’s Financial Services Agency will consider the proposal to be enacted within the month but noted that it may take several years to become a law.

Analysts are praising Japan’s recent moves noting that it will further make the country as a major cryptocurrency and blockchain development hub compared to regional competitors, China and South Korea who are still implementing unclear policies against ICOs.