The year of 2017 has been so far been a great year for the cryptocurrency markets. The markets have witnessed a huge surge in investor participation and new companies and startups adopting the new trend of fundraising through Initial Coin Offerings (ICOs).
However, recently, the ICO markets witnessed a major crackdown by several government agencies and regulatory bodies from across the globe. In the month of September, China cracked a whip on all of the local exchanges operating in the country putting a complete ban on ICO sighting reasons of fraudulent and illegal ways of raising money and trapping gullible investors. A similar decision was soon taken by another Asian country – South Korea – by banning ICOs completely within its boundary. With two major Asian countries pulling out of the cryptocurrency ICO market, there was a big slump in the daily trading volumes and the overall market sentiment turned quite pessimistic.
Now, everyone is eyeing on Japan, which is said to be a powerhouse of the cryptocurrency markets and drives nearly 63% of global trading volumes in Bitcoin. Japan so far has been quite positive on the working of cryptocurrencies and have taken several necessary measures over the past year to make cryptocurrency transactions mainstream. Earlier this year, Japan legalized the use of Bitcoins and recently in a move to establish a transparent working system, it also started giving legal licenses to several bitcoin exchanges to operate in the country.
However, in spite of all the positive steps being taken, co-founder of IndieSquare, Kogi Higash is still not convinced of ICO operations in Japan and says that looking to the conservative and risk-averse nature of Japanese businesses, there is “definite possibility” looming of an ICO ban in the near future.
“Japan’s not really ICO-friendly. [Regulators] are just more tentative. They’re just trying to figure out if it’s going to be good or bad. It doesn’t mean they won’t start regulating more heavily in the future when problems start emerging.”
If this is to happen, Kogi says that there will be a dark cloud over the legality of his own company. IndieSquare currently operates is a mobile token wallet which allows users to transfer coins and create their own. Kofi says that there will be two outcomes on the decision pertaining to ICOs
“If ICOs turn out to be a really revolutionary concept … then Japan will have a head start and attract a lot of ICO projects,” says Kogi.
There are already many of the global companies that have started to shift to Japan and Switzerland because of its friendly nature towards cryptocurrencies and this could help those countries gain early benefits and a huge collection in form of tax revenue.
On the other hand, with more scams surfacing out of illegal ways of raising funds through ICOs and if the pump-and-dump game to trap gullible investors continues, there could be a major ban on ICO operations in future and Kogi believes that there is a higher possibility for this to occur.
With major regulators from across the globe scrutinising the working of ICOs and closely observing the trends, it can be said that Japan too must be having a cautious eye on ICOs and any speculation leading fraudulent behaviour might trigger the decision of the government to imposing a ban on its operations.
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