JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
5.2 Regulation of Cross-Border Payments and Remittances
graph I Securities (defined in 10.4 Regulation of “Issuers” of Blockchain Assets ) or Paragraph II Securities (also defined in this section) based on their degree of tradability, and are subject to strict registration requirements, disclosure regu - lations and conduct rules. Commodities such as gold or crude oil are regu - lated under the Commodity Futures Act and are subject to regulations similar to those for secu - rities under the FIEA. However, the competent authority in respect of commodities is not the FSA but the Ministry of Agriculture, Forestry and Fisheries or the METI. The disclosure require - ments applicable to commodities are not as strict as those applicable to securities. Crypto-assets are regulated under the PSA and CAESPs that provide a venue for the trading of crypto-assets are subject to regulation. As is the case with securities under the FIEA, CAESPs are subject to strict registration requirements and conduct rules. The PSA does not impose strict disclosure regulations (as it does on securities) because the purpose of the PSA is limited to ensuring fairness of settlement instruments. 6.3 Impact of the Emergence of Cryptocurrency Exchanges Japan has emerged as one of the largest global crypto-asset markets and was the first country to establish a regulatory framework for crypto- assets. Besides enabling the registration of CAESPs wishing to provide CAES to residents in Japan, such framework seeks to protect cus - tomers of CAESPs and prevent crypto-related money laundering and terrorism financing. Under the PSA, CAESPs are required to:
Remittances of funds from Japan are gener - ally permitted except in limited cases involving restrictions under the Foreign Exchange and Foreign Trade Act (FEFTA). Specifically, the FEF - TA prohibits (i) remittances to designated parties such as terrorists, and (ii) remittances conducted for designated purposes such as contributions to North Korea’s and Iran’s nuclear activities. Where any resident in Japan makes a remittance exceeding JPY30 million to a destination outside Japan, such resident must also file a Payment Report to the Bank of Japan (after the remit - tance) through the bank or fund transfer service provider used by the remitter to make the fund remittance, in accordance with the FEFTA. 6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms In Japan, marketplaces are governed by laws and regulations, depending on the type of financial instrument in question – for example, securities such as stocks are regulated by financial instru - ments exchanges under the FIEA. Commodities such as gold or crude oil, on the other hand, are regulated by commodity exchanges under the Commodity Futures Act. Crypto-assets are regulated by CAESPs as marketplaces under the rules of the PSA. See 6.2 Regulation of Different Asset Classes . 6.2 Regulation of Different Asset Classes As mentioned in 6.1 Permissible Trading Plat- forms , financial instruments are regulated under different laws and regulations, depend - ing on their type. Securities such as stocks are regulated by the FIEA and are classified as Para -
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