Rules in the land of the rising sun.

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In the wake of the FTX disaster last year, when all American investors in FTX US and FTX International lost access to all their cryptocurrency funds. However, FTX Japan investors were quietly waiting for the Japanese Financial regulators to finish their assessment of the situation and then order all investors funds returned. This did indeed occur and FTX Japan investors in Japan received all their cryptocurrency funds.

This due in part to Japanese cryptocurrency exchange laws which make comingling of exchange and investors funds illegal, and specify that all investors funds are held by a neutral third party, and this is audited monthly.

Japan has made it a point to issue regulations regarding steps to take to create a cryptocurrency exchange, how to handle the funds of investors, and what type of investment offerrings exchanges my offer, which is very few.

Japan has already determined that cryptocurrency assets are not securities, instead PRIVATE ASSETS.

Japan has laws regarding creation and issuance of stablecoins, and anti-money laundering and KYC rules for cryptocurrency businesses.

Japan has been making an effort to encourage cryptocurrency business development, but also enacted a lot of protections for cryptocurrency investors.

It will be interesting to see if any of these regulations are replicated in other countries.

suggested reading: https://www.fsa.go.jp/en/news/2022/20221207/01.pdf