The Japanese financial regulator, theFinancial Services Agency(FSA) appears to be closer to introducing a series of new regulations in the crypto space. New policy documents indicate that the agency will begin policing non-fungible tokens (NFT) and the initial exchange offer (IEO) sectors.
Cryptonews.com reported in July on the creation of a new FSA study group that was charged with “to deal digital and decentralized financing (DeFi) as well as other matters”, including NFTs (CBDCs) and central bank digital currencies.
Since September 2017, when it started policing crypto sector, the FSA has regularly launched “study teams.” These groups include regulators, lawyers, academics, and professionals in the sector. The recommendations of these groups were then sent to the FSA, which almost always followed up with new guidelines and legal amendments.
Now, per its official plan for the remainder of the current financial year, the FSA has indicated that it will indeed look to regulate companies working with NFTs.
The document did not go into detail about the FSA’s plans regarding NFTs and DeFi, CBDCs and IEOs. However, it specifically mentioned them in the document. It mentioned the need for a “framework of regulation” to cover all the sectors.
The FSA plan is:
“Cryptoasset companies have started new operations with NFT business and IEO innovation. They now operate in areas that are not covered by traditional exchange business remits. It may be necessary to create a [regulatory] model that strikes the right balance between industry growth and user protection.
Before preparing its policy documentation, the FSA will wait for the full report from the study group. The FSA will request legal amendments from the government and receive a response likely to be received by self-regulating bodies that represent crypto exchanges.
Japanese companies with larger budgets will be watching closely:As reported previouslyA number of Japan’s biggest tech and finance companies are involved in the NFT/IEO game. Operator of chat appsLineThe e-commerce giantRakutenThey are seeking to expand their presence in the market with new offerings.
TheCoincheckExchange, operated byMonexFinancial group has also launched its NFT marketplace and fashion brand NFT tie in. It also holds IEO business interests.
The biggest competitor to the firms is the crypto-keenSBI GroupThe FSA could also be interested in addressing STOs with its new guidelines.