JAPAN Law and Practice Contributed by: Keisuke Hatano, Takeshi Nagase, Takato Fuki and Tomoaki Katayama, Anderson Mori & Tomotsune
means and excluding Japanese and other foreign currencies and “currency-denominated assets”– the same applies in the following bullet point) which may be: (a) used to pay an unspecified person the price of any goods, etc, purchased or borrowed or for any services provided; (b) sold to or purchased from an unspecified per- son; and (c) transferred using an electronic data processing system. • A proprietary value which may be: (a) exchanged reciprocally for a proprietary value specified in the preceding bullet point with an unspecified person; and (b) transferred using an electronic data processing system. “Currency-denominated assets” are assets denomi- nated in Japanese yen or another foreign currency. These assets do not fall within the definition of crypto- assets. For example, prepaid e-money cards are usu- ally considered “currency-denominated assets”. If a coin issued by a bank is guaranteed to have a certain value vis-à-vis fiat currency, this coin is unlikely to be deemed a “crypto-asset” but will be considered a “currency-denominated asset” instead. Definition of “Crypto-Asset Exchange Services” The term CAES means any of the following acts car- ried out as a business: • sale and purchase of crypto-assets or exchange of crypto-assets for other crypto-assets; • intermediary, brokerage or delegation of the sale, purchase or exchange; • management of users’ money in connection with these acts; or • management of crypto-assets for the benefit of another person. Overview of the Regulatory Framework Under the Amendment Bill of the FIEA As noted above, under the Amendment Bill of the FIEA, new provisions regarding information disclosure systems, business regulations and unfair trading regu- lations (including insider trading regulations) related to crypto-assets will be established.
In relation to the information disclosure systems, the Amendment Bill of the FIEA categorises crypto-assets with a centralised administrator (“specified crypto- asset issuer”) as “specified crypto-assets” and dis- tinguishes them from other crypto-assets (including Bitcoin and similar crypto-assets). Specifically, the Amendment Bill of the FIEA essential- ly maintains the abovementioned definition of “crypto- assets” under the PSA, while singling out those types of crypto-assets where there is a centralised admin- istrator and information asymmetry between said administrator and users as “specified crypto-assets,” and introducing issuer-based information disclosure regulations similar to those for securities. “Specified Crypto-Assets” refers to “crypto-assets for which only a specific person has the authority to issue such crypto-assets (including those specified by Cabinet Office Ordinance as being similar thereto)”. Furthermore, a “Specified Crypto-Asset Issuer” refers to “a person who issues or intends to issue Speci- fied Crypto-Assets (with respect to Specified Crypto- Assets specified by a Cabinet Office Ordinance under the preceding paragraph, a person specified by a Cabinet Office Ordinance).” The Working Group Report indicates a direction to define, via a Cabinet Office Ordinance, that crypto- assets based on permissioned blockchains and those issued based on foundational token standards, such as ERC-20, fall under the category of Specified Crypto-Assets. However, as the actual issuance and operational practices vary widely and individual deter- minations may be necessary based on the specific roles played by issuers and the actual provision of information to users, the scope of “similar items” in the Cabinet Office Ordinance is expected to be a key point of discussion in the future. 2.3 Regulated Firms and Legal Wrappers Where a fund (a legal wrapper) is used so that inves- tors invest in a fund that conducts crypto-asset trans- actions rather than directly engaging in such trans- actions, the regulatory treatment depends on the specific scheme of the relevant fund.
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