This week, the Japan Security Token Offering Association (JSTOA) released self-regulatory guidelines for firms engaged in crypto-related activities. Importantly, the information helps businesses adjust to meet updated legislation set to go into effect at the end of the month. The news demonstrates a high level of organization by Japanese financial institutions ready to embrace the new regulatory framework.
The updated guidelines give valuable insight into the changes set to occur when Japan’s Financial Instruments and Exchange Act (FIEA) and Payment Services Act institutes new crypto language on May 1, 2020. The new regulations, voted in by House of Representatives last month, drastically changes the operational guidelines for blockchain-based firms operating in Japan. As such, the JSTOA wants to ensure the market is aware of the specific alterations and how to remain compliant.
For example, the new legislation requires that exchanges keep crypto reserves equal to that of any user’s funds kept online. Additionally, the changes affect the STO community in major ways. Specifically, there are now stiff penalties and fines for market manipulation of any kind including spreading false rumors.
JSTOA – Perfect Timing
The JSTOA provided the entire Japanese market a valuable service with this publication. The post includes information on all the changes including customer asset management. You can also find information pertaining to digital record transfer changes, new rights and obligations, and a plethora of other new business requirements. Importantly, the JSTOA plans to monitor the market closely to ensure all market participants play by the new rules. To accomplish this task, the group hired a team of certified accountants and auditors.
Notably, the JSTOA guidelines call for strict investment solicitation guidelines for the market moving forward. Specifically, the group wants to get a clear cut understanding of what practices are ok when selling digital assets to the elderly. In the past, this demographic has lost considerable amounts of funding to a combination of fraudulent activity and a lack of investor understanding. Now, the JSTOA wants to do everything in their power to protect the elderly who desire to enter this new asset class.
Japan Security Token Offering Association
The Tokyo-based, Japan Security Token Offering Association (JSTOA) entered the market in October 2019 with the goal to try and bring cohesion to the sector. The group’s goals are to help guide legislators, increase blockchain adoption, and remove bad actors from the crypto sector. Importantly, the JSTOA celebrated the new crypto legislation updates voted in last month.
Now, the JSTOA prepares to show regulators their capabilities as the Japanese STO market is set to expand significantly. Notably, the group has backing from some of the largest financial firms in the country. For example, Monex, Nomura Securities, Rakuten Securities, and SBI Securities are all apart of the project. Consequently, the team has incredible influence in the region.
JSTOA – Looking Forward
The JSTOA continues to show the world they are one step ahead of the curve. These latest guidelines will provide much-needed clarity to entrepreneurs in the market. As such, the association continues to showcase its value in the budding Japanese blockchain sector.