Japanese Research Group Calls for 'Appropriate' ICO Rules
A research group led by members of Japan's private and public sectors called for ICO regulation and published its recommendations in a report today.
A research group in Japan has put forward a series of proposals related to initial coin offerings, including those focused on investor protection and money laundering prevention.
Spearheaded by a Tama University professor and general advisor Takuya Hirai, a member of Japan's House of Representatives, the ICO Business Research Group features advisors such as Yuzo Kano, the CEO and co-founder of cryptocurrency exchange bitFlyer and includes members drawn from various financial institutions, venture companies, and private-sector businesses. The group was first formed last November.
"Appropriate rules must be set to enable ICO to obtain public trust and to expand as a sound and reliable financing method," the report, released Thursday, reads.
Though not indicated in the Group's publication, Bloomberg Technology reports that the proposals will be considered by the country's financial regulator, the Financial Services Agency (FSA), later this month, with the possibility of eventually becoming law.
On the question of issuing and selling tokens, the group argued that issuers should provide a means for tracking the development of white papers, in addition to outlining "conditions for the provision of conveniences such as services and rules on the distribution of procured funds, profits, as well as residual assets, to investors of tokens, shareholders and debt holders."
Likewise, the Group recommends that ICOs should be designed "to be acceptable to existing shareholders and debt holders," and should not be used as a means of circumventing traditional financing methods.
In order to protect investors, the authors suggest that token issuers should comply with existing KYC methods in order to assess the suitability of investors and to confirm their identities. They also advocated for measures to prevent insider trading.
"Cryptocurrency exchanges should define and adopt an industry-wide minimum standard on token listing," the report adds, concluding:
The full report can be found below:
2018_ico_en by CoinDesk on Scribd
Japanese flag with coins image via Shutterstock
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