Authors： Attorney-at-law Tomohiro Kandori
Attorney-at-law Makoto Hibi
Attorney-at-law Takayuki Yano
Consultant Hidenori Shibata
April 2023
On 24 March 2023, the Financial Services Agency of Japan (the FSA) published the finalised amendments (the Amendments) to the ‘Guideline for Supervision of Crypto-Asset Exchange Service Providers’ (the Amended Guideline)1 along with the FSA’s views in response to the public comments posted on the draft Amended Guideline (the FSA’s Views)2.
The Amended Guideline and the FSA’s Views introduced the following numerical criteria, with the aim of providing clear guidance for determining whether tokens fall under the definition of crypto-assets, which are regulated under the Payment Services Act:
If - the price per minimum trading unit is high (e.g., JPY 1,000 or more) or - the issuance volume of the minimum trading unit is limited (e.g., 1,000,000 or less), tokens do NOT fall under the definition of crypto-assets. * ‘Minimum trading unit’ here is likely to refer to the minimum trading unit after accounting for the divisibility of the tokens. |
Strictly speaking, the issuance volume and price of the tokens are not the only factors indicated in the Amended Guideline and the FSA’s Views for determining whether tokens fall under the definition of crypto-assets. However, these numerical criteria regarding the issuance volume and price seem to successfully clarify situations where tokens, especially NFTs, are not considered crypto-assets—a matter which, before the Amendment, was sometimes unclear.
For further details, please see the following past newsletters or contact us:
1 https://www.fsa.go.jp/common/law/guide/kaisya/16.pdf [Japanese]
https://www.fsa.go.jp/common/law/guide/kaisya/e016.pdf [English, before the Amendment, as of June 2021 (accessed 26 April 2023)]
2 https://www.fsa.go.jp/news/r4/sonota/20230324-2/20230324-2.html [Japanese]
