The Center for Rule-Making Strategies at the University of Tama published a list of guidelines for regulation and full legalization of initial coin offerings (ICO) in Japan, Bloomberg reported on April 4.
A list of guidelines from a research group supported by the government includes rules for anti-money laundering (AML), identifying investors, tracking project progress, and protecting existing owners of capital and debt. The Japanese financial services agency will discuss this proposal, which eventually can be passed into law in a few years, reports Bloomberg.
The document establishes the principles of the release, such as the definition and disclosure of means to track the implementation of technical documents, as well as the disclosure of potential influences on investors, shareholders and debt shareholders.
In addition, the document specifies certain principles of trade, including confirmation of the identification and suitability of the client (“Know your customer”), the adoption of global minimum standards for tokens lists and the restriction of unfair trade practices such as insider trading.
Recognizing that “it is currently difficult to classify the entire ICO [sic], since many upcoming, but unknown types can exist,” the paper proposes that the rules apply to three types of ICOs: the type of venture company, the type of ecosystem for teamwork efforts with several corporations or government agencies, as well as a large type of company for own financing of high risk projects.
The report clearly identifies ICOs as securities similar to those adopted by the US Securities and Exchange Commission. Researcher Kenji Marashima said that “ICO is an innovative technology, so if we can implement good principles and rules, they have the potential to become a new way of attracting funding.”
One adviser to the research group, Takuya Hirai, is a member of the ruling Liberal Democratic Party and one of the architects of the law, which legalizes the exchange of cryptocurrencies in Japan last year. Among the other members of the group are Yuzo Kano, the head of the world’s largest Bitcoin exchange, as well as experts from the country’s largest banks; Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc.
Publication of friendly ICO guidelines is combined with the positions of China and South Korea, which last year banned ICO .