Connect with us

Hi, what are you looking for?


Japan’s Financial Services Agency Grants Limited Rights to DAO Member Tokens, Easing Regulations

Japan‘s Financial Services Agency (FSA) aimed to facilitate the development of decentralized autonomous organizations (DAOs) and clarify the legal framework surrounding them.

The FSA has proposed a new amendment to the definition of Article 2 of the Financial Instruments and Exchange Act in a move to provide clarity on the legal nature, operational rules, member responsibilities, ownership, and tax relationships of DAOs.

The amendment is known as the “Cabinet Office Ordinance (Draft) Amending Part of the Cabinet Office Ordinance Concerning the Definitions Provided in Article 2 of the Financial Instruments and Exchange Act,” according to a report from Coinpost.

DAO Tokens to Receive the Same Treatment as LLC Rights

The proposed amendment aims to grant a specific token called the “Limited Company Type DAO Employee Rights Token” the same treatment as regular limited liability company (LLC) member rights.

By doing so, the FSA intends to ease regulations on employee rights in tokenized LLCs and streamline the operations of DAOs.

The FSA is currently seeking public comments on the proposed amendment until March 4th.

Once the necessary procedures are completed, the amendment will be promulgated and implemented, providing a more defined legal status for DAOs in Japan.



— 平将明(たいらまさあき/Taira Masaaki) (@TAIRAMASAAKI) February 2, 2024

DAOs, enabled by blockchain technology and communication tools, have emerged as a means of community management.

However, the lack of clear legal status poses risks of unexpected legal application and hinders the smooth formation and operation of DAOs.

Furthermore, having a well-defined legal status is believed to enhance trust and facilitate smoother transactions for DAOs in their external activities.

While creating new laws specifically for DAOs is a time-consuming process, utilizing existing legal forms can offer a practical approach to clarify their legal position and promote their use, the report said.

“By establishing and operating a DAO as a limited liability company, it is possible to give the DAO legal personality, clarify the limited liability of its members, realize flexible organizational management through self-governance in the articles of incorporation, and clarify tax treatment.”

Japan Conducts DAO Rulemaking Hackathon

In line with the efforts to develop a legal framework for limited liability company-type DAOs, the Liberal Democratic Party’s Digital Society Promotion Headquarters, and the web3 project team conducted a “DAO Rulemaking Hackathon” at the end of last year.

They received issues and requests from multiple companies, organizations, and investors, which were then submitted as recommendations to the Minister of Finance, per the report.

Last year, the country’s National Tax Agency also revealed that it has revised its law to exempt crypto token issuers from 30% corporate taxes on unrealized gains, effective from June 20.

At the time, Prime Minister Fumio Kishida said the move was aimed at boosting its blockchain and crypto sectors amid a push for “new capitalism.”

Crypto investors will still be liable to pay a maximum of 55% income tax on any earnings over JPY200,000 ($1,797) related to cryptocurrency, classified as “miscellaneous income.”

The post Japan’s Financial Services Agency Grants Limited Rights to DAO Member Tokens, Easing Regulations appeared first on Cryptonews.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



On Wednesday, Bitcoin price is showing signs of a significant uptrend, currently trading around the $57,200 mark with a notable increase of over 1.25%....


Kraken has unveiled a new division dedicated to providing services to institutional clients as it seeks to gain a foothold in the Bitcoin exchange-traded...


The Internal Revenue Service (IRS) said on Tuesday that it hired two crypto industry executives to aid in digital asset reporting, compliance, and enforcement...


RSRV, a hotel ownership marketplace co-founded by Aspen-based entrepreneur Stephane De Baets, is partnering with the Tezos blockchain to tokenize a part of the...


Polygon-backed Humanity Protocol has secured strategic investments from over 20 crypto venture capital firms for its privacy-centric Web3 identity solution. Hashed, CMCC, Cypher Capital,...


Matrixport applied for a virtual asset trading license with Hong Kong’s securities regulator on Feb. 26. A roster published on the Securities and Futures...

You May Also Like

Financial Advisors


Financial Advisors


Financial Advisors

The humongous outbreak of the dreaded coronavirus has brought about a groundbreaking change in what the world perceived as ‘normal’. With an estimated 280,391,189...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 Respect Investment. All Rights Reserved.