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Japan’s FSA Issues Warning to Unregistered ICO Agency

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The Financial Service Agency (FSA) of Japan would be issuing a stern warning to an unregistered initial coin offering (ICO) agency, which has been doing business without a license.

According to a report from Nikkei, the warning is being issued to Blockchain Laboratory, which is based in Macau.

The report said:

“The agency has decided the company’s activities could cause investors to incur losses. The FSA will work with the police and the Consumer Affairs Agency to bring criminal charges if the company fails to respond to the warning.”

Blockchain Laboratory operates as an initial coin offering agency to raise funds using cryptocurrencies. It has been offering seminars to lure investors. The payment services law, which was revised in April 2017, allows only registered operators, or those that have applied for registration, to operate in Japan.

The FSA has already advised the company to halt its business activities in Japan, without success. According to the agency officials, the FSA “will warn the company directly, and name it on the FSA’s home page.”

If the operator still fails to comply, criminal charges would be slapped.

Since the revised payment services law was enforced in April of last year, Japan has acknowledged cryptocurrencies as a legitimate method of payment. The law also compels crypto exchanges to register with the FSA. The FSA allows only registered operators, or those that have applied for registration, to operate in Japan.

The warning being given to Blockchain Laboratory would be the FSA’s first under the revised payment services law.

The move is part of the FSA’s more assertive investigation of the activities of unregistered operators in Japan.

The revised law bans such unregistered exchanges from operating and soliciting in the country.

At the moment, there are 16 cryptocurrency exchanges that hold a license to operate in Japan and another 16 are still being scrutinized. This includes Coincheck which suffered a loss of 58 billion yen (USD$533 million) in a recent hack.

In a recent interview, Bitflyer CFO Midori Kanemitsu had this to say:

“Now people understand that they need to use safe exchanges, which are registered with FSA and have a high standard of security.”

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