Eternity Law International News Legal regulation of operations with cryptocurrencies in Japan

Legal regulation of operations with cryptocurrencies in Japan

Published:
May 30, 2018

Japan is the World leader in innovations. Therefore, there is nothing surprising in that the legal regulation of operations with cryptocurrencies in Japan is not prohibited by the legislation of the country.

There is a Commission on Digital Assets of Japan, and there is also a special law on the regulation of exchanges. In this country, digital money is taxed in accordance with the standard rules of the country.

HISTORICAL REFERENCE

The first steps in regulating the circulation of digital money in Japan began in February 2014 after the collapse of the large stock exchange MtGox. The reaction of the Liberal Democratic Party did not wait – an official statement about taxation, operations with the cryptocurrency and legal status of the Bitcoins was soon published.

In the summer, the Commission on Digital Assets of Japan was created, whose duties included protecting the interests of the cryptocurrency business. This is not a state organization, but a self-controlled body. Nevertheless, the authorities support the Commission.

In June 2015, the government began to explore the possibility of adopting new methods to counteract the legalization of illegal proceeds, the financing of terrorism and other illegal activities that can be carried out using cryptocurrency.

At the end of 2015, it became known that the Financial System Council had set up a working group that drafted proposals for the regulation of digital money. It was suggested that the relevant exchanges be registered with the Financial Services Agency.

In February 2016, information appeared that it was planned to introduce changes in the legislation that would allow us to regard digital money as a currency. It was assumed that such changes would give an opportunity to invest in the crypto currency and affect the rules of the stock exchanges.

In May, the relevant bill was adopted, but digital money was not equated to currency, but to assets. Thus, the cryptocurrency has become a means of not payments, but exchange.

Since that moment, the activity of the cryptocurrency organizations in Japan has increased, and one of the major Japanese banks is developing its own crypto currency.

Based on 11 regulatory legal acts, the Liberal Democratic Party stated that the cryptocurrency is not a security or any kind of currency. Japanese banks can not open accounts in Bitcoin or be intermediaries in dealing with digital money.

The first manual, issued by the Commission on Digital Assets of Japan, recommended that you contact the Commission when creating trading platforms and exchanges working with cryptocurrency. In addition, the guide referred to the adoption of measures to prevent the legalization of funds obtained in this way from illegal activities.

Also it was a question of user safety. Another recommendation was the use of the “Know Your Customer” policy.

In May 2016, a new law was adopted that:

  • required mandatory registration of exchanges in the Financial Services Agency;
  • allowed the regulator to make checks and even apply administrative measures to the exchanges;
  • recognized the value of the cryptocurrency, equivalent to assets, but the digital currency is not regarded as a means of payment;
  • classified digital money as a means of exchange, through which it is possible to purchase goods and services.

TAXATION

Proceeding from the statement of the Liberal Democratic Party, the cryptocurrency and related operations are taxed according to the standard rules of the state.

Thus, income tax is imposed on the income of an individual, and legal entities pay taxes on profits. In addition, sales of digital money are subject to a value-added tax.

Legal regulation of operations with cryptocurrencies in Japan is a complex process that requires the help of legal experts. Contact Eternity Law International to get qualified help from professional lawyers.

You could be interested

Money management in 2020

Money management in 2020 – first of all, it is necessary to determine jurisdiction. Managing organizations, brokers, trusts, investment funds and foreign banks, after opening foreign accounts, offer a variety of services to persons with personal assets with high rates. Despite the fact that in the country where you live, the use of similar services...

Registration of IT company

SELECTION OF JURISDICTION AND REGISTRATION OF IT COMPANY Registration of IT company initially begins with a choice of jurisdiction. It has long been known that the development of private enterprise is a complex process that requires perseverance, financial investment, professional knowledge and technical skills. One of the main obstacles that creates difficulties for the entrepreneur...

New bill on the cryptocurrency

The government of the European Union implements rules for the settlement of cryptomoney to support AML policy. The new draft law on the cryptocurrency will change everything. In April 2018, the European Parliament supported the directive on measures aimed at eliminating the cryptocurrency in the financing of terrorist operations and money laundering. The law will...

Company registration Panama

Registration cost USD 1,325.00 Company renewal cost USD 1,275.00 Number of directors 3 Corporate tax 0.00% Paid Authorized Capital 0.00 Reporting requirements no COMPANY DOCUMENTS: Articles of incorporation Apostilled Extract from the Register Share Certificates Minutes of the Meeting of the Board of the Directors Apostilled Minutes of the Meeting of the Board of the...

Digital Banks

Digital banks: source of profit or cause of loss? In the era of innovative technologies, the so-called “digital banks” have become very widespread in the world. These are platforms that do not have their own branches in the traditional sense – offices with employees, cash desks, ATMs and terminals. The emergence and development of such...

Crypto license in Cuba

All VASPs that function in Cuba must get permission. Crypto license in Cuba is a document giving the official right to perform various operations with virtual assets and offer its services there. This permit is accessible for individuals and companies. Its validity period is one year; however, if needed, permission can be renewed. Licenses for...
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof

Kyiv

Baseina street, 7

London

Grosvenor Gardens, 52

Edinburgh

Lochrin Square, 1

Nicosia

Jacovides Tower, 5 floor

Tallinn

Kesklinna linnaosa, Tuukri 19

Riga

Esplanade, 7 floor

Vilnius

Gediminas Avenue, 44A

New York

New Rochelle, Huguenot St, 175

Sydney

20 Martin Place

Singapore

3 Fraser Street, #08 DUO Tower

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai

Porto

2609 Avenida da Boavista

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7