Japan’s JCBA Submits Initial Proposal for IEO Regulatory Reform to JVCEA

Key Takeaways

JCBA (Japan Cryptocurrency Business Association) submits initial proposal for IEO (Initial Exchange Offering) regulatory reform to JVCEA (Japan Virtual Currency Exchange Association).

The proposal outlines four key agendas aimed at stabilizing the IEO market.

The reform aims to enhance user protection and promote domestic IEOs over foreign exchanges.

Introduction

The Japan Cryptocurrency Business Association (JCBA), headquartered in Chiyoda, Tokyo and led by President Hiroshi Hirosue, announced the submission of an initial proposal for the reform of the IEO (Initial Exchange Offering) system. The proposal was developed by the ICO & IEO Subcommittee, chaired by Seihiro Yoshida, and submitted to the Japan Virtual Currency Exchange Association (JVCEA), led by President Genki Oda.

Background and Current Issues

Since May of this year, the ICO & IEO Subcommittee has been actively discussing the future of the IEO system, leveraging insights from various businesses involved in cryptocurrency and Web3. The proposal consolidates these discussions and has been submitted to JVCEA, a self-regulatory body for cryptocurrency exchanges and related derivative trading.

Four Agendas for IEO Reform

The proposal outlines four key agendas for reform:

Price Determination: Diversification of pricing methods and explicit warnings about pricing.

Liquidity: Setting liquidity targets at the time of listing and ensuring a conducive environment for liquidity.

Price Stability: Establishing rules for price stabilization measures at the time of listing.

Sale Restrictions: Formalizing and tightening lock-up regulations for issuers and underwriting exchanges.

Future Directions

The proposal is an initial draft discussed solely within the JCBA. Future discussions will involve various stakeholders and focus on the feasibility of implementing these reforms within the scope of self-regulatory rules.

The reform aims to encourage users to manage their assets under Japanese regulations rather than using foreign exchanges, thereby enhancing user protection.

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