Japan’s FSA Explains New Regulations For Crypto Investment

What happened to cryptocurrency today? Japan’s FSA clarifies current regulations for establishment and sales of cryptocurrency ETFs.

Bitcoin ETF

Crypto-Based Funds

Following the growing interest in cryptocurrency investments, the Japan’s FSA implemented certain regulations for crypto ETFs. Since legalizing cryptocurrencies as a payment means in April 2017, Japan has gained global recognition as one of the best crypto-regulated countries in the world.

In an interview with one of the spokespersons, he noted that it is imperative for an instrument to match up with the Act on Investment Trusts and Investment Corporations. This is the only way by which it will be recognized as an investment fund.

The Japan’s FSA also noted that the current guidelines specify that the sales of funds and assets which aren’t part of the regulated ones are prohibited. These regulated assets include real estate properties and securities. However, they emphasized that cryptocurrencies are not within this category.

Funds with Less Crypto Assets

Certain investment trusts do not primarily invest in cryptocurrencies. Due to the unstable nature and liquidity risks of cryptocurrencies, the Japan’s FSA has stated that they will be careful with the formation of instruments that invests less in cryptos. This is because these instruments encourage speculation.

Bitcoin ETF Qualified and Accredited Investors

Also, the FSA says qualified and accredited investors like regional financial institutions and pension funds are not allowed to make crypto-related investments.

The volatility of cryptocurrencies can harm the credibility of an investment corporation; therefore, investing in such an unregulated asset is not appropriate.

Considering the high risk, an investor has to bear; the regulator deemed it fit to set up rules to check crypto investments.

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