Japan’s FSA Updates Crypto Trust Regulations Author: Ali Raza Last Updated: 02 October 2019 Japan is one of the countries that have created robust frameworks for the cryptocurrency industry. There are several crypto related businesses that have received regulatory approval to conduct their business in the country. Several Japanese citizens engage in crypto trading as the number of exchanges operating in the country continues to grow. The crypto industry in Japan is regulated by the Financial Services Agency (FSA), and the body is continually improving its regulations as the industry expands. FSA seems to update guidelines The regulatory body has released a provisional update of its guidelines that govern financial instruments. According to the temporary update, the regulator believes that financial products that involve crypto investment will be made available to Japanese citizens in the future, but the body notes that there are indications that these kinds of investment options could trigger speculation. As a result, the FSA believes that there is a need to carefully handle the business of investment trusts that place their investment in cryptocurrencies and other similar assets. The FSA’s documents go on to state that any trusts investing in the digital asset class could be viewed as inappropriate because these trusts were created for specific assets. The regulator says that cryptocurrencies should fall under non-specific assets, and hence, trusts cannot invest in them. It seems that the FSA is working on making these regulatory adjustments to protect trusts from the volatile nature of cryptocurrencies. Stakeholders will participate in a 30 day consultation period which is being run by the FSA. It is likely that the proposed guidelines will soon take effect because the FSA rarely changes its position if previous proposals are anything to go by. Whenever the body makes a move in a crypto related matter, it’s position usually becomes law. Businesses in the Japanese crypto industries could opt to ignore the FSA’s regulations and offer deregulated trust products. However, exchanges and crypto related firms in the country follow FSA regulations to the dot, and it will likely be the case with these proposed updated regulations. One of the media outlets in Japan, iForex reports that the new rules will bring difficulty to crypto trust offerings in the country. Top crypto firms form STO association As there continue to be developments around the Japanese crypto industry, six of the top financial companies in the country have come together and created a self-governing association for Security Token Offerings (STOs). The body has been named the Japan Security Token Offering Association, and it is working on obtaining official recognition as a self-governing body from the country’s regulatory authorities. The association is made up of three crypto exchange operators and three big-name financial firms. The exchange operators involved in the association are Rakuten, SBI’s securities branch, and Monex Group, the company that owns Coincheck exchange. The remaining three companies in the association are Nomura Securities, Daiwa Securities, and Kabu. Monex Group issued a statement and said that the association has appointed Yoshitaka Kiato, CEO of SBI, as the president. Kiato is a long-time crypto enthusiast and a member of Ripple’s board. The companies have formed this group to give STO businesses the chance to develop and explore this area.