JAPAN Law and Practice Contributed by: Keisuke Hatano, Takeshi Nagase, Takato Fuki and Tomoaki Katayama, Anderson Mori & Tomotsune
3.2 Set-Up Requirements Applicants for CAESP status are required to be (i) stock companies ( kabushiki - kaisha ) or (ii) foreign CAESPs with an office and representative in Japan and reg- istered or licensed in a foreign country. Accordingly, any foreign entity wishing to register as a CAESP must establish either a subsidiary (in the form of a kabu- shiki - kaisha ) or a branch in Japan. To date, however, no instances of registration as a branch have been approved by the JFSA. Thus far, all foreign CAESPs have established subsidiaries in Japan and have obtained registration of those subsidiaries. In addition, applicants must have: • a sufficient financial base (ie, a minimum capital of JPY10 million and positive minimum net assets); • a satisfactory organisational structure and certain internal systems for the appropriate and proper provision of CAES; and • internal systems to ensure compliance with appli- cable laws and regulations. Applicants must submit a registration application con- taining, among others: • its trade name and address; • the amount of its capital; • the names of its directors; • the names of the crypto-assets it will handle; • the content of and the means by which it will pro- vide the relevant CAES; • the names of outsourcees (if any) and the address- es thereof; and • the method by which the management of its users’ assets will be segregated from the management of its own assets. A registration application must be accompanied by certain attachments, including: • a document pledging that there are no circum- stances constituting grounds for refusal of registra- tion; • an extract of the certificate of residence of the applicant’s directors, etc; • the résumés of the applicant’s directors, etc; • a list of the applicant’s shareholders;
Japan must obtain a CAESP registration if it provides CAES to residents of Japan. As described in 6.1 Pay- ments, the JFSA has been issuing warnings to such unregistered overseas operators. Note that a person engaging in the new “Crypto-Asset Transaction Business” must be registered with the JFSA as an FIBO under the Amendment Bill of the FIEA. The Crypto-Asset Transaction Business covers the following activities: (i) the purchase and sale of crypto-assets (including the exchange of crypto-assets for other crypto- assets); (ii) the intermediary, brokerage or delegation of such purchase and sale; (iii) the underwriting of Specified Crypto-Assets; (iv) the offering or sale of Specified Crypto-Assets; (v) the handling of solicitation for the acquisition of Specified Crypto-Assets; (vi) the management of users’ money in connection with the activities listed in (i) through (v); (vii) the management of crypto-assets for the benefit of another person; and (viii) the borrowing of crypto-assets. The bill includes transitional measures outlined below. • Existing CAESPs registered under the PSA on the effective date (excluding those that are also FIBOs) may continue to engage in the Crypto-Asset Trans- action Business (excluding crypto-asset borrowing; the same applies hereinafter) without obtaining a FIBO registration under the FIEA for a period of six months from the effective date. • Existing FIBOs that are registered as CAESPs under the PSA on the effective date may continue to engage in the Crypto-Asset Transaction Busi- ness without obtaining a registration change under the FIEA for a period of six months from the effec- tive date. • Where any such existing operator under (i) or (ii) above files an application for FIBO registration or a registration change within that six-month period, it may continue to operate until such registra- tion or change is granted or refused, subject to a maximum extension period of two years from the effective date.
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