Japan’s Financial Agency Warns Unregistered Foreign ICO Agency

News, Regulation | February 12, 2018 By:

Japan’s Financial Service Agency (FSA) will reportedly issue its first warning to an unregistered initial coin offering (ICO) agency.

The FSA said the warning will be issued to Macau-based firm Blockchain Laboratory, which has been doing business without a license. The company’s activities include cryptocurrency and ICO consulting services. It is also conducting seminars to attract investors.

“The agency has decided the company’s activities could cause investors to incur losses,” the FSA said. “The FSA will work with the police and the Consumer Affairs Agency to bring criminal charges if the company fails to respond to the warning.”

The regulator said it has repeatedly advised Blockchain Laboratory to halt its business activities in the country, without success. The FSA will now warn the company directly, and name the company on its home page. If Blockchain Laboratory still fails to comply, criminal charges will be filed.

The move is part of the regulators’s more aggressive scrutiny of the activities of unregistered operators in the country. Since the revised payment services law was enforced in April 2017, Japan has acknowledged cryptocurrencies as a legitimate method of payment but not currency. Under the law, crypto-related companies are required to register with the Prime Minister and must meet a number of requirements.

Last week, the FSA started on-site inspections on multiple crypto exchanges to examine their internal management systems, including system risk management. Finance minister Taro Aso said they will try to determine if these companies are taking adequate steps to protect customers’ accounts.