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Nagashima Ohno and Tsunematsu Overview of FSA Bill

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Nagashima Ohno and Tsunematsu STO FSA Bill

The highly acclaimed legal firm of Nagashima Ohno and Tsunematsu released a commentary on a proposed Japanese FSA bill this week. The bill was first proposed by the Japanese Financial Services Agency (FSA) on March 15, 2019. If passed, it would make a final distinction between security tokens and other forms of cryptocurrency. Consequently, Japanese STOs would see increased regulations.

The law firm Nagashima Ohno and Tsunematsu decided to make life easier on the crypto world when they published their insightful commentary on the new FSA bill. To better understand the proposed changes, you first need a brief rundown on the current legal status of crypto in Japan.

Japan Crypto

Currently, all forms of cryptocurrency in Japan fall under the Payment Services Act (PSA). The PSA is very broad in its description of crypto. In fact, it labels all crypto “virtual currencies.” Analysts noted that this high level of ambiguity slowed mainstream adoption in the country as major investment firms need clear regulations.

So What’s in the FSA Bill?

According to Nagashima Ohno and Tsunematsu, the proposed bill points out numerous areas in need of clarification. The first issue addressed by the bill is the use of the term “virtual currencies.” The FSA wants the term removed and replaced with “crypto assets”. This distinction is important when you consider that most cryptocurrencies are not used at currency at all.

Nagashima Ohno and Tsunematsu via Homepage

Nagashima Ohno and Tsunematsu via Homepage

Also in the new bill, crypto assets will be, for the first time in Japan, different than tokenized securities. Consequently, the FIEA will have the power to determine which category an ICO falls under. Additionally, all exchanges operating in the country must register for licensing as a “Crypto Asset Exchange Service Provider.”

FSA Customer Safety

Consumer protections in the bill include requiring the use of “cold wallets” by exchanges holding user’s crypto when not in use. Also, businesses would need to provide a plethora of background and management information to the FIEA before embarking on a blockchain-based crowdfunding venture.

False Advertising

Another important aspect of the FSA bill is an increase in penalties for false advertising and soliciting. This proposition falls in line with the SEC, who, recently filed charges against the Rapper the Game and a Former Beauty queen for promoting the Paragon ICO.

KYC/AML

All exchanges operating in Japan would need to adhere to strict KYC and AML regulations if the bill becomes law. The requirements would make anonymous exchanges a thing of the past in Japan. This could be a move that may be difficult to achieve from a technical aspect when you consider the ever-growing number of decentralized exchanges emerging.

Asian Exchange Licensing in the Past

The Exchange Licensing area of the bill could see some backlash from the Asian cryptocommunity as the licensing requirements were not included. This type of vagueness is reminiscent of when China initially shut down its exchanges in 2017. Luckily, Japan is pro-crypto, so the chances of this happening in the Land of the Rising Sun are slim to none.

Nagashima Ohno and Tsunematsu

The firm of Nagashima Ohno and Tsunematsu is a multinational law firm that offers premier legal services to those seeking to do business in Japan. The firm has offices in New York, Tokyo, Singapore, and Bangkok. Notably, Nagashima Ohno and Tsunematsu are one of the “Big Four” Japanese law firms in the country.

Japan Crypto

Japan continues to see increased STO activity with one report placing 2019 Q1 growth up 130-percent. Both investors and traditional investment firms desire updated regulations that include terminology relevant to the crypto space. This latest bill is an attempt to alleviate some of these concerns.

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David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including bitcoinlightning.com

Security Token News

Blockport STO Fails to Gain Traction – Platform to Shutdown

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Blockport STO Fails to Gain Traction - Platform to Shutdown

Failure to Launch

On a disappointing note, Blockport has announced the cancellation of their ongoing security token offering. After launching the event, roughly 1 month ago, the team has indicated that they have failed to attract their minimum threshold of investments.

This comes as a letdown to the industry, as Blockport represented one of the first security token offerings to be offered through the Tokeny platform. To date, only a handful of STOs have taken place through ANY issuance platform.

Future Aspirations

While Blockport will be returning investments to the few participants in their STO, they have indicated that this is not the end for them. Their intent is to scale back operations in the short term, reflect, and establish a path for future growth.

This means that the platform will be shutting down in the coming weeks, revering to a ‘development mode’.

Commentary

Blockport CEO, Sebastiaan Lichter, elaborated on the cancellation in a statement to the public. The following is what he had to say on the matter.

“In the past few months our team has worked extremely hard to launch the first round of our STO, and yesterday this ended after being open for almost one month…In short, the results of the fundraise are not sufficient to proceed with the issuance of BPS tokens.”

Despite this, Sebastiaan Lichter remained confident in the future of blockchain. He continued,

“We still see a lot of opportunities in this industry and have built a top performing trading platform that many people love to use and which has had almost zero downtime or issues since we launched it in the summer of 2018…Whilst developing our platform, our goal is to explore opportunities that support a restart of the Blockport platform in the future.”

BlockPort

Operating out of Amsterdam, Blockport is a Dutch company, which was launched in 2017. Under the watch of CEO, Sebastiaan Lichter, Blockport has developed and launched a trading platform, tailored toward, both, utility and security tokens.

The security token offering, discussed here today, was launched through the Tokeny issuance platform, on March 31st, 2019.

Tokeny

Tokeny is a Luxembourg based company, which was launched in 2017. Above all, Tokeny acts as an issuance platform, providing companies with solutions for the tokenization of assets. Tokeny was responsible for facilitating the Blockport STO – For their part, the event went off without a hitch.

In Other News

While the failed STO is an unfortunate situation, BlockPort is by no means alone. For a variety of reasons, there have been various deals to have fallen through in the past few months. The following articles detail a couple of these situations.

Harbor Cancels Convexity Properties STO

Due Diligence Process Delays tZERO Investment

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BitBond Opens Bounty Program for Live Security Token Offering

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BitBond Opens Bounty Program for Live Security Token Offering

BitBond Bounty

BitBond, a blockchain company hosting a FINRA approved STO, has recently announced the launch of a bounty program. This program was launched in an attempt to raise market awareness of their ongoing security token offering.

This STO, scheduled to be live until early June, has seen modest success thus far, with investors contributing over €2 million to date. This puts them well on their way to raising the minimum €3 million in the event.

In an attempt to ensure the minimum €3 million threshold is met in their STO, the bounty program consists of 6 main ways in which participants can be rewarded.

  • Hunter Bounty
    • Referrals leading to bounty program participation
  • Affiliate Bounty
    • 5% commission on referrals leading to investments over €10,000
  • Signature Bounty
    • Token compensation for active BitcoinTalk users which advertise the STO in their signature.
  • Creative Bounty
    • Rewards for creative advertising in the form of memes, gifs, images, etc.
  • Social Media Bounty
    • Compensation for STO promotion through qualified Twitter, Facebook, LinkedIn, and Telegram accounts
  • Content Bounty
    • Rewards for creation of articles, and videos, which raise awareness about the BitBond STO.

Bounty Programs

A bounty program is a promotional event, aimed towards raising awareness of a fundraiser. Participants in such programs are typically compensated for promoting a company with tokens. Promotional tasks are often varied, such as writing articles, attaining referrals, reporting bugs, and so on.

While bounty programs were commonplace throughout the ICO boom, the concept is new when being applied to security token offerings. Time will tell if this promotional tool is an effective one when dealing with this new form of fund raising.

Commentary

BitBond CEO, Radoslav Albrecht, commented to CrytoGlobe on the choice to host a bounty program. He stated the following.

“Since our launch in 2013 Bitbond has always worked closely with the crypto and blockchain community. This bounty program gives us the opportunity to engage further with our community, reward Bitbond early adopters and spread the news about our new groundbreaking project, the Bitbond STO.”

BitBond

BitBond is a Germany based company, which was launched in 2013. Above all, BitBond utilized blockchain to facilitate financial services. This primarily includes the issuance of business loans.

Company operations are overseen by Founder and CEO, Radoslav Albrecht.

We recently detailed BitBond and their FINRA approval – a feat not achieved by scores of applicants prior to BitBond. Check out the details to this success HERE.

In Other News

Beyond BitBond utilizing the Stellar blockchain for issuing security tokens, Stellar has experienced growing levels of adoption in recent months. The following articles demonstrate various ways in which this adoption has occurred.

Smartlands Releases Stellar Powered Wallet Supporting security Tokens

Stellar Chosen by Wevest for Security Token Offering Platform

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Security Token News

Poloniex Cleans House as Tokens Delisted for Fear of Being Called Securities

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Poloniex Cleans House as Tokens Delisted for Fear of Being Called Securities

Poloniex Delisting Assets

Poloniex has given unfortunate news to enthusiasts of various assets supported through their platform. The popular exchange has announced that, due to ongoing regulatory uncertainty, they will be de-listing a variety of assets.

This event is a precautionary one, as the possibility exists that the structuring of these assets would classify them as securities. Fearing retribution from the SEC, Poloniex has decided to play it safe, and remove their support.

Uncertainty Remains

While the portfolio of offered assets on Poloniex remains strong, this does not mean that other assets can rest easy.

It has been made known, by various industry participants, over the past few weeks that uncertainty remains pervasive in the digital securities space. This is largely, in part, due to a lack of clarity afforded by United States regulatory body, the Security and Exchange Commission.

Until the SEC is able to provide more detailed guidance on these digital assets, expect to see more de-listings, for fear of these being dubbed securities.

Down and Out

The affected assets in this announcement total 9, which each unique in their structuring and target markets. They are as follows,

  • Augur (REP)
  • Omni (OMNI)
  • Decred (DCR)
  • Game (GAME)
  • Ardor (ARDR)
  • Bytecoin (BCN)
  • Gas (GAS)
  • Lisk (LSK)
  • Nxt (NXT)

Commentary

In a statement to the public, Poloniex explained their reasoning for the delisting of various assets. The Poloniex team broke the news, to holders of these tokens, by stating the following.

“We are committed to complying with regulatory requirements in every jurisdiction. Today’s action is a result of regulatory uncertainty in the US market. Specifically, it is not possible to be certain whether US regulators will consider these assets to be securities.”

Despite this, the team continued, expressing optimism moving forward.

“We understand how frustrating this choice is for our customers, and for the crypto community more broadly. We believe in the power and potential of these assets, and will continue to focus time and energy on supporting positive policy and regulatory developments for crypto assets in the US and around the world.”

Poloniex

Poloniex is a Delaware based cryptocurrency exchange, which was launched in 2014. In the time since their launch, Poloniex has gone on to establish themselves as a leading exchange. Poloniex’s reputation has been strengthened in the past year, since being acquired by Circle.

Circle

Circle is a Boston based company, which made waves in 2018, when their $400 million acquisition of Poloniex occurred. In the time since this move, Circle has worked to bring Poloniex in line with regulations, building a strong reputation, and growing the platform at the same time.

In Other News

While this is unfortunate news for enthusiasts of the affected assets, Poloniex doesn’t simply have a habit of delisting. In previous months, we have noted their addition of Polymath and their utility token for use through their security token’s tailored services.

Security Token Platform, Polymath (POLY), Listed on Growing Number of Exchanges

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