Japan’s Financial Services Agency (FSA) has said it will soon move to regulate Initial Coin Offerings to protect investors, according to a December 1st report from local news site Jiji.
The report states that the regulations may limit how much individuals can invest in an ICO, a capital formation tool where new businesses solicit investment from the cryptocurrency community to fulfil an advertised purpose. The investors are usually issued a new cryptocurrency in return. The FSA will require these cryptocurrency issuers to register their business operation in a move designed to combat the possibility of fraudulent offerings that have plagued the industry.
Cryptocurrency advisory firm Satis Group released a damaging report in March that indicated approximately 80% of ICO offerings were scams, and that the vast majority of what remained were anything but promising.
It is expected that regulations will come into effect early next year after parliamentary bills to revise the laws surrounding financial instruments and exchange law are passed.