Japan Approves Regulatory Shift to New Framework Despite Industry Concerns

Japan's Financial Services Agency (FSA) has finalized a major regulatory overhaul, shifting the oversight of crypto assets from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA). This change treats crypto as an investment product, similar to traditional securities, aiming to bolster investor protection through standardized disclosures, stricter oversight of business conduct, and mandatory contingency reserves for exchanges to cover potential losses.

The new framework introduces enhanced disclosure rules for token issuers regarding supply, governance, and technical risks, and expands enforcement powers against unregistered overseas operators. While the FSA seeks to integrate crypto under the FIEA rigor, potentially opening doors for regulated products like ETFs, the industry has voiced significant concerns.

Industry leaders warn that the increased compliance costs associated with FIEA regulation could threaten the viability of the digital asset sector, with some suggesting self-regulatory measures might be preferable to avoid overregulation. Unresolved technical and legal issues, such as asset inheritance, also remain a point of contention.

(Source：BeInCrypto)