The Japanese will allow startups to issue crypto tokens instead of shares when seeking public financing. This move aims to diversify the revenue streams available to new businesses. The new form of equity financing is governed by a law called the Investment Limited Partnership Act. The law establishes conditions that allow limited liability partners to sell shares to partners with unlimited liability.
New regulations increase crypto adoption
Japan is home to what was once the largest Bitcoin exchange on the planet, Mt. It was also home to Gox. Besides, it arguably has the most mature crypto regulations in the world. In early June, it introduced new stablecoin legislation to allow banks, money transfer agents and trust companies to issue tokens. Danny Chong of decentralized finance yield platform Tranchess says yen-backed stablecoins are growing in popularity. They have achieved a transaction volume of $500 billion so far. This comes as dollar-based stablecoins gain prominence due to the launch of PayPal’s PYUSD asset.
Meanwhile, the Japanese government recently revised the requirements for crypto exchanges. Following this, crypto exchange Binance received a license to operate in Japan. The move comes after regulators in the US accused Binance of mishandling customer funds. This was a move that, among other things, catalyzed the company’s expansion in Asia.
ICO Equity Financing frowned upon by US SEC
Japan’s new rules for equity financing contrast with those of its U.S. counterparts. As you follow from Kriptokoin.com, a judge recently ruled that Ripple Labs’ sale of XRP to raise funds from institutional investors violated US securities law. The U.S. Securities and Exchange Commission (SEC) has repeatedly cracked down on projects that fail to register crypto tokens before selling them to raise funds.
However, the SEC does not have a clear path for registration. So he received a lot of criticism for taking enforcement actions without preparing the way. Industry players have repeatedly requested to determine which tokens are securities. He even suggested some regimes. However, the SEC continues to argue that current rules are sufficient. US lawmakers are proposing that the SEC and the US Commodity and Futures Trading Commission share oversight of the crypto industry. In this regard, several draft legislative proposals for clarity have also emerged. However, these are not yet clear.
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