Japan is considering legalisation of initial coin offerings. A government-backed research group has put forward a report ‘Call for Rule-making on ICO’ that would see initial coin offerings (ICOs) given regulatory definition and approval.
"ICO is still in its infancy and has no industry practices yet. Appropriate rules must be set to enable ICO to obtain public trust and to expand as a sound and reliable financing method," the report reads.
Japan’s ICO Business Research Group is a task force that includes lawmakers, academics, bankers, and the chief executive of bitFlyer, Japan’s largest cryptocurrency exchange.
The study group is led by Toshifumi Kokubun, a professor at Tama University in Tokyo. Its general adviser is Takuya Hirai, a member of the ruling Liberal Democratic Party and an architect of last year’s legalisation of cryptocurrency exchanges. Among the group members we can find Yuzo Kano, CEO of bitFlyer Inc., the nation’s largest Bitcoin (Bitcoin) exchange. Besides the group also includes members from the nation’s largest banks Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc.
The group called for the government to legalize ICOs and adopt clear industry rules and practices that encourage growth but also protect investors.
"We propose the five principles below to ensure the protection of investors regarding thepurchase and sales of tokens. [Trading principle 1] Token sellers should confirm the identity (Know YourCustomer: KYC) and suitability of customers. [Trading principle 2] Administrative companies that support the issuance oftokens should confirm the KYCs of issuers. [Trading principle 3] Cryptocurrency exchanges should define and adopt anindustry-wide minimum standard on token listing. [Trading principle 4] After tokens are listed, unfair trade practices of such tokenssuch as insider trading should be restricted. [Trading principle 5] Parties related to the trading of tokens such as issuers,administrative companies, and token exchanges shouldmake efforts to ensure cyber security."
ICOs have emerged as a favored way for blockchain startups to get funding. $8.8 billion has been raised since the start of last year.
By Jade Olafson