Japan’s Financial Services Agency (FSA) is considering the regulation of unregistered firms that solicit investments in cryptocurrencies. The development is reportedly a bid to close a loophole in the country’s existing regulatory framework, in which unregistered firms that collect funds in crypto rather than fiat currencies remain in a gray zone.
This situation exists because these firms do not explicitly come under the purview of Japan’s Financial Instruments and Exchange Act, which prohibits unregistered companies from collecting investment funds in cash, but fails to mention funds collected in cryptocurrency form.
As Cointelegraph Japan noted, the impetus for reconsidering the current status of such firms was thrown into relief last fall, when Tokyo police arrested eight men suspected of operating a pyramid scheme — reportedly collecting a total of 7.8 billion yen ($68.4 million) in both cash and cryptocurrency from around 6,000 investors across 44 prefectures, including Tokyo.