A research group backed by the Japanese government has developed a set of proposed guidelines that could provide “regulatory definition and approval” for initial coin offerings, according to a report from CNBC. If adopted, the proposed rules would provide the controversial cryptocurrency funding option with legal status in the country, while offering increased protections for investors.
The proposed rules would address potential money-laundering concerns by requiring investors to properly identify themselves. There would also be protections to guard against insider trading, and rules designed to “protect existing shareholders and debt holders.” In addition, the guidelines would require increased focus on cybersecurity.
Japan’s effort to find a legal path forward for ICOs stands in stark contrast to the way other major nations have addressed the initial coin offering conundrum. In 2017, China ordered a complete ban on ICOs, in a move designed to quell the speculative frenzy in that country’s cryptocurrency market. South Korea soon followed suit with a similar ban.
Regulators in the United States have also taken a harder line toward ICOs in recent months. The SEC has been carefully scrutinizing ICOs and has launched enforcement actions against companies whose ICOs are believed to be in violation of U.S. law.
