Legal and regulatory assistance for crowdfunding services as well as platform-building related to novel fund-raising methods, including ICOs and STOs, and the issuance, management and operation of tokens

Market Developments: Crowdfunding

Rapid growth in the area of crowdfunding, a framework that typically connects new and growing companies with small-amount individual investors via the internet, broadens the source of fund-raising available to risk capital, but  also exposes investors to a higher degrees of risk. Against this background, legal restraints have been imposed on crowdfunding to strike a balance between the fund-raising needs of entrepreneurs and the protection of individual investors.

Specifically, crowdfunding comprises “donation-based,” “reward-based” and “equity-based” crowdfunding. As an example of the issues involved, the application of the Financial Instruments and Exchange Act and the Money Lending Business Act becomes a concern if the activity in question falls under “equity-based” crowdfunding.

Market Developments: ICOs and STOs

Blockchain fund-raising has the potential to replace traditional means of fund-raising in meeting latent fund-raising needs and contributing to the digital transformation of fund-raising globally.

An example is ICOs (Initial Coin Offerings), where funds are raised through the issuance of digital tokens using blockchain technology. STOs (Security Token Offering) are another blockchain fund-raising method which is subject to securities regulation following amendments to the Financial Instruments and Exchange Act.

Our Services

Compliance challenges vary widely depending on the structure employed in crowdfunding, ICOs and STOs. Additionally, because of the frequent amendment of applicable  laws, regulations and guidelines, including the Payment Services Act and the Financial Instruments and Exchange Act, a comprehensive understanding of both the details of the amendments as well as the regulatory history is important. Further, with respect to the evolving area of crowdfunding, consultation with the responsible authority is vital prior to implementation.

The firm boasts a number of lawyers who have been seconded to administrative agencies with jurisdiction over the Payment Services Act, the Financial Instruments and Exchange Act and other regulations relevant to crowdfunding, ICOs and STOs and who still actively participate in committees and associations that spearhead the formulation of rules in this area. Our specialists in this area support regulatory registrations and notifications and advise on regulatory limitations, and the administrative and operational aspects of crowdfunding, ICOs and STOs.


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Public Service
Masakazu Masujima became a member of Public-Private Group for Promoting Blockchain, Cabinet Secretariat
MHM was highly commended among shortlisted candidates in this year’s Financial Times Asia Pacific Innovative Lawyers Awards
Public Service
Masakazu Masujima became the member of Study Group on Blockchain Legislation, Ministry of Economy, Trade and Industry
Public Service
Takane Hori became the member of the Academia-Industry-Government Forum Regarding the State of Financial and Capital Markets
Public Service
Masakazu Masujima became the member of the "Blockchain Study Group," Ministry of Economy, Trade and Industry

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Magazine Article
"Q&A on Systems and Practices of Financial Service Intermediary Businesses (Part 3): Restriction on Activities and System Development - (1) Obligation to Execute Businesses in a Fair and Sincere Manner and Obligation to Provide Information"
Magazine Article
"Legal Issues and Practice of Cryptocurrency"
Magazine Article
"Legal Commentary: Investment Crowdfunding Regulations and Related Issues - A New Method of Financing Drawing Attention in the COVID-19 Pandemic"
Magazine Article
"Crypto-Asset Trading, STO and Related Misconduct"
"Cryptoassets Law"

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