Japan (FSA) Spilt Crypto in 2 Categories!!!
Japan's Financial Services Agency (FSA) has shared a discussion paper on crypto rules, aiming to split digital assets into two types.
A recent Coinpost report says the FSA wants public input on a paper called "Verification of the state of the system related to crypto assets.” They will take feedback on the new crypto framework until May 10, 2025.
The paper outlines a two-part approach to crypto regulation, dividing assets based on how they get funding. The first type includes altcoins from new projects that still need community support to grow.
The second type, Type 2, consists of more decentralized and established crypto assets, like Bitcoin and Ethereum, which do not issue tokens to raise funds. These are known as “non-fundraising or non-business crypto.”
Depending on the category, different crypto rules will apply. Type 1 token issuers must share details about their funding, project information, and investment risks, following the FSA's regulations.
The rules for Type 1 crypto will start once a project attracts many regular investors. The FSA will also check if certain Type 1 projects should follow security token rules.
However, the FSA will not work directly with Type 1 project issuers because it's hard to identify them and impose rules.
Under this plan, crypto exchanges must inform the FSA about significant price changes in Type 2 crypto that affect the market. The FSA noted that most communication might happen through exchanges.
The committee plans to consider regulatory trends from other countries and public input before finalizing the crypto rules.
Earlier, the FSA mentioned it would update the Financial Instruments and Exchange Act. They hope to present these changes to parliament by 2026. With the revision, cryptocurrencies will be regarded as a new category of financial products instead of just payment methods.
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