Cabinet Office Order on Crypto-Asset Exchange Service Providers(Cabinet Office Order No. 7 of 2017)
Last Version: Cabinet Office Order No. 44 of 2021
TOC
History

  • July 25, 2022
    • Last Version: Cabinet Office Order No. 44 of 2021
    • Translated Date: July 21, 2022
    • Dictionary Version: 14.0
  • June 24, 2019
    • Last Version:
    • Translated Date: August 27, 2018
    • Dictionary Version: 12.0

Cabinet Office Order on Crypto-Asset Exchange Service Providers (Any data that the title of a law indicates to be a "Tentative translation" has not yet been proofread or corrected by a native English speaker or legal translation expert; this data may be revised in the future.Tentative translation)
Cabinet Office Order No. 7 of March 24, 2017
Table of Contents
Chapter I General Provisions(Articles 1 to 12)
Chapter II Business(Articles 13 to 32)
Chapter III Supervision(Articles 33 to 39)
Chapter IV Miscellaneous Provisions(Articles 40 to 44)
Supplementary Provisions
Chapter I General Provisions
(Definition)
Article 1(1)The terms "crypto-assets", "crypto-asset exchange services", "exchange of crypto-assets, etc.", "management of crypto-assets", "crypto-asset exchange service provider", "foreign crypto-asset exchange service provider", "certified association for payment service providers", "crypto-asset exchange business", "trust company, etc.", and "deposit-taking institutions" as used in this Cabinet Office Order mean crypto-assets, crypto-asset exchange services, exchange of crypto-assets, etc., management of crypto-assets, crypto-asset exchange service provider, foreign crypto-asset exchange service provider, certified association for payment service providers, crypto-asset exchange business, trust company, etc. and deposit-taking institutions as prescribed in Article 2 of the Payment Services Act (hereinafter referred to as the "Act"), respectively.
(2)In this Cabinet Office Order, the meanings of the terms set forth in the following items are as prescribed respectively in those items:
(i)crypto-asset exchange service provider, etc.:a crypto-asset exchange service provider, a foreign crypto-asset exchange service provider, or a person that conducts crypto-assets-related derivatives transactions, etc. prescribed in Article 185-22, paragraph (1), item (i) of the Financial Instruments and Exchange Act (Act No. 25 of 1948) in the course of trade;
(ii)transactions pertaining to the crypto-asset exchange services:transactions pertaining to the acts set forth in the items of Article 2, paragraph (7) of the Act;
(iii)crypto-asset exchange contract:the contract prescribed in Article 63-9-3, item (i) of the Act;
(iv)entrustment, etc.:an offer for intermediary, brokerage or agency services;
(v)acceptance of entrustment, etc.:accepting an offer for intermediary, brokerage or agency services;
(vi)crypto-asset margin transaction:the exchange of crypto-assets, etc. conducted by granting credit to users of the crypto-asset exchange services; and
(vii)performance-guarantee crypto-assets:the performance-guarantee crypto-assets prescribed in Article 63-11-2, paragraph (1) of the Act.
(Attachment of a Translation)
Article 2If there is a document to be submitted to the Commissioner of the Financial Services Agency (if the authority of the Commissioner of the Financial Services Agency has been delegated to the Directors-General of Local Finance Bureaus or the Director-General of the Fukuoka Local Finance Branch Bureau (hereinafter referred to as the "Directors-General of Local Finance Bureaus, etc.") under the provisions of Article 31, paragraph (1) of the Order for Enforcement of the Payment Services Act (hereinafter referred to as the "Order"), those Directors-General of Local Finance Bureaus, etc.; the same applies hereinafter except in Articles 25, 26, 28, 42, and 43) pursuant to the provisions of the Act (limited to Chapter III-2; the same applies in the following Article), the Order (limited to Chapter III-2; the same applies in the following Article), or this Cabinet Office Order that cannot be prepared in Japanese under special circumstances, a Japanese translation must be attached to the relevant document; provided, however, that if the document is the articles of incorporation and any of the documents set forth in the items of Article 6 (excluding items (i), (ii), (iv) through (vi), (ix) and (xvii)) that is prepared in English, it is sufficient to attach a Japanese translation of the summary thereof.
(Conversion of Foreign Currency or Crypto-Assets)
Article 3If a document to be submitted to the Commissioner of the Financial Services Agency pursuant to the provisions of the Act, the Order, or this Cabinet Office Order contains any amounts or quantities indicated in a foreign currency or crypto-assets, the equivalent amounts converted to the Japanese currency of those amounts or quantities and the standard used for the conversion must be included in the supplementary notes to the document.
(Application for Registration)
Article 4A person intending to obtain a registration referred to in Article 63-2 of the Act must submit to the Commissioner of the Financial Services Agency a written application for registration referred to in Article 63-3, paragraph (1) of the Act prepared using appended Form 1 (in the case of a foreign crypto-asset exchange service provider, using appended Form 2) by attaching the documents referred to in paragraph (2) of the same Article.
(Other Particulars to be Stated in Written Application for Registration)
Article 5The particulars specified by Cabinet Office Order as prescribed in Article 63-3, paragraph (1), item (xi) of the Act are the following particulars:
(i)the outline of the crypto-assets to be used;
(ii)the location and contact address of the business office that handles complaints from the users or provides consultations for the users of the crypto-asset exchange services; and
(iii)the name, trade name or any other name of the major shareholder (meaning a shareholder who holds voting rights of 10 percent or more of the voting rights held by all the shareholders (excluding the voting rights of the shares which cannot be exercised for all particulars that are subject to a resolution at a general meeting of shareholders and including the voting rights of the shares for which the shareholder is deemed to have voting rights under the provisions of Article 879, paragraph (3) of the Companies Act (Act No. 86 of 2005)); the same applies in Article 12, paragraph (2), item (x));
(iv)the name of the certified association for payment service providers (limited to the association that holds crypto-asset exchange service providers as its members (meaning the members prescribed in Article 87, item (ii) of the Act); the same applies hereinafter) to which the applicant belongs.
(Documents to be Attached to Written Application for Registration)
Article 6The documents specified by Cabinet Office Order as prescribed in Article 63-3, paragraph (2) of the Act are the following documents (in the case of a document certified by a public agency, limited to one issued within three months prior to the date of application):
(i)a document prepared using appended Form 3 pledging to the effect that the applicant does not fall under any of the items of Article 63-5, paragraph (1) of the Act;
(ii)an extract of the resident record of the directors, etc. (meaning the directors, etc. prescribed in Article 63-5, paragraph (1), item (xi) of the Act; the same applies hereinafter) of the applicant (if the directors, etc. are foreign nationals, a copy of a residence card prescribed in Article 19-3 of the Immigration Control and Refugee Recognition Act (Cabinet Order No. 319 of 1951), a copy of a special permanent resident certificate prescribed in Article 7, paragraph (1) of the Special Act on the Immigration Control of, Inter Alia, Those Who Have Lost Japanese Nationality Pursuant to the Treaty of Peace with Japan (Act No. 71 of 1991), or an extract of the resident record ) or any substitute thereof;
(iii)if the former surname (meaning the former surname prescribed in Article 30-13 of the Order for Enforcement of the Act for Basic Register of Residents (Cabinet Order No. 292 of 1967; the same applies hereinafter) and the given name of the directors, etc. of the applicant are stated together with the current surname and the given name in a written application for registration under the provisions of Article 4, and the document listed in the preceding item does not prove that former surname and the given name, a document to prove the former surname and the given name;
(iv)a certificate by a public agency proving to the effect that the directors, etc. of the applicant do not fall under Article 63-5, paragraph (1), item (xi), (b) of the Act (if the directors, etc. are foreign nationals, a written pledge prepared using appended Form 4) or any substitute thereof;
(v)a curriculum vitae or history of the directors, etc. of the applicant prepared by using appended Form 5 or Form 6;
(vi)the list of shareholders prepared using appended Form 7 and the articles of incorporation and a certificate of registered information or any substitute thereof;
(vii)in the case of a foreign crypto-asset exchange service provider, a document proving that it is a person who carries out crypto-asset exchange services in a foreign state under the registration of the same kind as the registration referred to in Article 63-2 of the Act pursuant to the provisions of laws and regulations of that foreign state (including permission or other administrative dispositions similar to that registration);
(viii)the latest balance sheet (including related notes) and profit and loss statement (including related notes) or any substitute thereof (in the case of a corporation established in a business year that includes the date of the application for registration, the balance sheet as of the date of establishment prepared under the provisions of Article 435, paragraph (1) of the Companies Act or any substitute thereof);
(ix)in the case of a company with accounting auditors, a document containing the contents of the accounting audit report prepared under the provisions of Article 396, paragraph (1) of the Companies Act for the business year immediately preceding the business year that includes the date of the application for registration;
(x)a document stating the expected income and expenditure from the crypto-asset exchange services for the three business years after the commencement of the business;
(xi)a document explaining the outline of the crypto-assets to be used;
(xii)an organization chart concerning the crypto-asset exchange services (including organizations that perform the operations pertaining to internal controls);
(xiii)a curriculum vitae of the person responsible for the management of the crypto-asset exchange services;
(xiv)internal rules concerning the crypto-asset exchange services (meaning internal rules, etc. and other documents equivalent thereto; the same applies in Article 24);
(xv)contract documents used in carrying out transactions pertaining to crypto-asset exchange services with the users of the crypto-asset exchange services;
(xvi)if part of the crypto-asset exchange services is entrusted to a third party, the contract document pertaining to the entrustment contract;
(xvii)a document stating the particulars specified as follows for the categories of cases respectively set forth therein:
(a)when there is a designated dispute resolution organization for crypto-asset exchange business (meaning the designated dispute resolution organizations for crypto-asset exchange business prescribed in Article 63-12, paragraph (1), item (i) of the Act; hereinafter the same applies in this item and Article 22, paragraph (1), item (viii)):the trade name or other name of the designated dispute resolution organization for crypto-asset exchange business, which is the counterparty to the basic contract for execution of procedures specified in Article 63-12, paragraph (1), item (i) of the Act that the crypto-asset exchange service provider concludes;
(b)when there are no designated dispute resolution organizations for crypto-asset exchange business:the details of the complaint processing measures and dispute resolution measures specified in Article 63-12, paragraph (1), item (ii) of the Act carried out by the crypto-asset exchange service provider; and
(xviii)other documents containing other relevant particulars.
(Notice to Applicants)
Article 7When giving a notice of registration prescribed in Article 63-4, paragraph (2) of the Act, the Commissioner of the Financial Services Agency is to give it by a written notice of completion of registration prepared using appended Form 8.
(Public Inspections of Register of Crypto-Asset Exchange Service Providers)
Article 8The Commissioner of the Financial Services Agency is to keep the register of crypto-asset exchange service providers pertaining to the relevant registered crypto-asset exchange service provider at the Local Finance Bureau or the Fukuoka Local Finance Branch Bureau having jurisdiction over the location of the head office of the crypto-asset exchange service provider (in the case of a foreign crypto-asset exchange service provider, its principal business office in Japan; the same applies hereinafter) and make it available for public inspection.
(Financial Basis)
Article 9(1)The requirements specified by Cabinet Office Order as prescribed in Article 63-5, paragraph (1), item (iii) of the Act are as follows:
(i)the amount of stated capital is no less than 10 million yen; and
(ii)the amount of net assets (meaning the amount obtained by deducting the total amount of liabilities from the total amount of assets recorded in the balance sheet prescribed in Article 6, paragraph (1), item (viii) or any substitute thereof) is not below zero (in the case of a person that conducts the management of crypto-assets, the amount of net assets is not less than the equivalent amount converted to the Japanese currency of the quantity of performance-guarantee crypto-assets).
(2)The person specified by Cabinet Office Order as prescribed in Article 63-5, paragraph (1), item (xi), (a) of the Act is a person that is unable to adequately carry out the cognition, decision making, and communication necessary for properly performing their duties pertaining to the crypto-asset exchange services due to mental impairment.
(Notice of Refusal of Registration)
Article 10When giving a notice under the provisions of Article 63-5, paragraph (2) of the Act, the Commissioner of the Financial Services Agency is to give it by a written notice of refusal of registration prepared using appended Form 9.
(Cases Where Advance Notification Is Not Required)
Article 11The cases specified by Cabinet Office Order as prescribed in Article 63-6, paragraph (1) of the Act are the following cases:
(i)if the crypto-asset exchange service provider intends to discontinue the use of the crypto-assets it currently uses;
(ii)if the holders of the crypto-assets currently used by the crypto-asset exchange service provider are granted new crypto-assets by reason of the change in the technology or specification used for the current crypto-assets (except when the crypto-asset exchange service provider could have known such change in advance in connection with the crypto-asset exchange services); and
(iii)if the crypto-asset exchange service provider intends to change particulars relevant to the details or means of the crypto-asset exchange services, other than the following particulars:
(a)the category of the crypto-asset exchange services or any equivalent particular;
(b)the method of receiving offers from the users of the crypto-asset exchange services;
(c)the methods of management of the money and crypto-assets of the users of the crypto-asset exchange services under the provisions of Article 63-11, paragraphs (1) and (2) of the Act; and
(d)the methods of management of performance-guarantee crypto-assets under the provisions of Article 63-11-2, paragraph (1) of the Act.
(Notification of Changes)
Article 12(1)When intending to make a notification under the provisions of Article 63-6, paragraph (1) of the Act, a crypto-asset exchange service provider must submit to the Commissioner of the Financial Services Agency a written notice of changes prepared using appended Form 10 by attaching documents specified in the following items for the categories of cases respectively set forth therein:
(i)if the crypto-asset exchange service provider intends to change the crypto-assets it currently uses:the document set forth in Article 6, item (xi) that pertains to the particulars to be changed; and
(ii)if the crypto-asset exchange service provider intends to change the details or means of the crypto-asset exchange services:the documents set forth in Article 6, items (xii) through (xv) that pertain to the particulars to be changed, and if the particulars fall under item (iii), (c) or (d) of the preceding Article, a document that can demonstrate the fact related to the change.
(2)When intending to make a notification under the provisions of Article 63-6, paragraph (2) of the Act, a crypto-asset exchange service provider must submit to the Commissioner of the Financial Services Agency a written notice of changes prepared using appended Form 10-2 by attaching documents specified in the following items for the categories of cases respectively set forth therein (in the case of a document certified by a public agency, limited to one issued within three months prior to the date of notification):
(i)in the case of a change in the trade name:a certificate of registered information that contains the particulars pertaining to the change or any substitute thereof, and a document prepared using appended Form 3 pledging to the effect that the crypto-asset exchange service provider does not fall under any of the items of Article 63-5, paragraph (1) of the Act;
(ii)in the case of a change in the amount of stated capital:a certificate of registered information that contains the particulars pertaining to the change or any substitute thereof;
(iii)in the case of establishment or abolition of a business office or a change in the location of a business office (excluding the case set forth in item (ix)):a certificate of registered information that contains the particulars pertaining to the change;
(iv)in the case of a change in the directors, etc.: the following documents:
(a)the documents set forth in Article 6, items (ii), (iv) and (v) that pertain to the person who newly became a director, etc. and the documents set forth in item (vi) of the same Article that pertain to the change;
(b)if the former surname and the given name of the person who newly became a director, etc. are stated together with their current name in a written notice of changes, and the documents set forth in (a) above (limited to the document set forth in Article 6, item (ii)) do not prove the former surname and the given name, a document to prove the former surname and the given name; and
(c)a document prepared using appended Form 3 pledging to the effect that the crypto-asset exchange service provider does not fall under any of the items of Article 63-5, paragraph (1) of the Act;
(v)in the case of a change in the crypto-assets currently used:the document set forth in Article 6, item (xi) that pertains to the particulars that have been changed;
(vi)in the case of a change in the details or means of the crypto-asset exchange services:the documents set forth in Article 6, items (xii) through (xv) that pertain to the particulars that have been changed;
(vii)in the case of a change in the details of business that has been entrusted or a person to whom business is entrusted:the document set forth in Article 6, item (xvi) that pertains to the particulars that have been changed;
(viii)in the case of a change in the other businesses:a certificate of registered information that contains the particulars pertaining to the change or any substitute thereof;
(ix)if a crypto-asset exchange service provider who has obtained the registration referred to in Article 63-2 of the Act from the Director-General of a Local Finance Bureau, etc. has changed the location of its head office to an area over which the Director-General of another Local Finance Bureau, etc. has jurisdiction:the document specified in item (iii) and a written notice of completion of registration referred to in Article 7 that was delivered prior to the change;
(x)in the case of a change in the major shareholders:the list of shareholders prepared using appended Form 7; and
(xi)if the crypto-asset exchange service provider has become a member of a certified association for payment service providers or has withdrawn from one:a document that can demonstrate the fact that the crypto-asset exchange service provider has become a member of a certified association for payment service providers or has withdrawn from one.
(3)When a notification is made under the provisions of the preceding paragraph in the case set forth in item (ix) of the same paragraph, the Director-General of a Local Finance Bureau, etc. must notify the Director-General of another Local Finance Bureau, etc. referred to in the same item to the effect that the notification has been made.
(4)The Director-General of a Local Finance Bureau, etc. who has received the notification under the provisions of the preceding paragraph is to register the particulars notified of in the register of crypto-asset exchange service providers and notify the person who made the notification by a written notice of completion of registration prescribed in Article 7.
Chapter II Business
(Measures to Ensure Information Security Management Pertaining to Crypto-Asset Exchange Services)
Article 13A crypto-asset exchange service provider must take measures to ensure sufficient control of the electronic data processing system pertaining to the crypto-asset exchange services, in accordance with the details and means of its crypto-asset exchange services.
(Measures to Ensure Information Security Management Pertaining to Personal Information of Individual Users)
Article 14The crypto-asset exchange service provider must take necessary and appropriate measures for preventing leakage, loss, or damage of the information regarding the security management of personal information it uses concerning the users of the crypto-asset exchange services who are individuals, the supervision of its employees and, in the case of the entrustment of the use of the relevant information, the supervision of the entrusted parties.
(Use of Specified Non-public Information)
Article 15When using personal information regarding race, creed, family origin, domicile of origin, healthcare, or criminal background of the users of the crypto-asset exchange services who are individuals, and other specified non-public information (meaning information learned in the course of business of the crypto-asset exchange services that has not yet been publicly disclosed), a crypto-asset exchange service provider must take measures to ensure that the information is not used for a purpose other than for ensuring the appropriate operation of the business and for other purposes that are found to be necessary.
(Measures to Ensure Proper and Steady Operation of the Entrusted Business)
Article 16When entrusting part of the business of the crypto-asset exchange services to a third party, a crypto-asset exchange service provider must take the following measures in accordance with the details of the entrusted business:
(i)measures to ensure that the relevant business is entrusted to a person who has the ability to perform the business in a proper and secure manner;
(ii)measures to ensure that necessary and appropriate supervision, etc. is conducted with regard to the person to whom the relevant business is entrusted, including measures to verify whether the person is performing the business in a proper and secure manner by, among others, checking the status of performance of the business by the person regularly or as necessary and causing the person to make any necessary improvements;
(iii)necessary measures to ensure appropriate and prompt processing of complaints from the users of the crypto-asset exchange services conducted by the person to whom the relevant business is entrusted;
(iv)measures to prevent hindrance to the protection of the users of the crypto-asset exchange services, etc., including measures to ensure that if circumstances have arisen under which the person to whom the relevant business has been entrusted is unable to perform the entrusted business appropriately, the business will be promptly entrusted to another appropriate third party; and
(v)measures to ensure that, if it is necessary for the purpose of ensuring the proper and steady operation of the business of the crypto-asset exchange service provider and the protection of the users pertaining to the business, necessary measures such as the amendment or cancellation of the contract pertaining to the entrustment of the relevant business will be taken.
(Method of Indicating Advertisement of Crypto-Asset Exchange Services)
Article 17If a crypto-asset exchange service provider places an advertisement concerning the crypto-asset exchange services provided thereby, the crypto-asset exchange service provider must clearly and accurately indicate the particulars set forth in the items of Article 63-9-2 of the Act (in the case of a crypto-asset exchange service provider that does not conduct the exchange, etc. of crypto-assets, limited to the particulars set forth in items (i) and (ii) of the same Article).In this case, the crypto-asset exchange service provider is to indicate the letters or numerical characters representing the particulars set forth in item (iii) of the same Article and the items of the following Article in a size which does not differ substantially from the size of the largest letters or numerical characters representing particulars other than such particulars.
(Particulars Affecting Users' Judgments)
Article 18The characteristics of crypto-assets specified by Cabinet Office Order as material characteristics that will affect users' judgment as prescribed in Article 63-9-2, item (iv) of the Act are the following particulars:
(i)when there is a risk of losses directly from fluctuations in the value of the crypto-assets, that fact and the reasons therefor; and
(ii)the fact that crypto-assets can be used for the purpose of paying consideration only with the consent of the person who receives payment of consideration.
(Particulars for Which Misleading Representations Are Prohibited)
Article 19The particulars specified by Cabinet Office Order as prescribed in Article 63-9-3, item (i) of the Act are the following particulars:
(i)the particulars related to the mechanism for the holding and transfer of the crypto-assets;
(ii)the particulars related to changes in transaction volumes or prices of the crypto-assets or prospects for these;
(iii)the particulars related to the financial resources or credit of the crypto-asset exchange service provider;
(iv)the particulars related to the performance of the crypto-asset exchange services conducted by the crypto-asset exchange service provider;
(v)the particulars related to the content of the rights and obligations indicated on the crypto-assets;
(vi)the particulars related to the financial resources or credit of the issuer of the crypto-assets, the debtor pertaining to the rights indicated on the crypto-assets, or the person who can exert a material impact on the value or the mechanism of the crypto-assets, or the business conducted by such person; and
(vii)the amount or the maximum amount of the fees, remuneration, or costs to be paid by the users of the crypto-asset exchange services or the calculation method thereof.
(Prohibited Acts)
Article 20The conduct specified by Cabinet Office Order as being likely to weaken the protection of users of crypto-asset exchange services or hinder the provision of crypto-asset exchange services in a proper and steady manner as prescribed in Article 63-9-3, item (iv) of the Act is the following conduct:
(i)when concluding a crypto-asset exchange contract or soliciting the conclusion thereof, or when placing an advertisement concerning the crypto-asset exchange services provided by the crypto-asset exchange service provider, to make representation concerning the characteristics of crypto-assets or the particulars set forth in the items of the preceding Article without indicating reasonable grounds that support those particulars to users (excluding crypto-asset exchange service providers, etc.; the same applies in the following item through item (vii));
(ii)to solicit users to conclude a crypto-asset exchange contract without clearly and accurately indicating the particulars set forth in the items of Article 63-9-2 of the Act (in the case of a crypto-asset exchange service provider that does not conduct the exchange, etc. of crypto-assets, limited to the particulars set forth in items (i) and (ii) of the same Article) to users (in cases of delivering a document or employing any other method equivalent thereto, including the failure to indicate the letters or numerical characters representing the particulars set forth in item (iii) of the same Article and the items of Article 18 in a size which does not differ substantially from the size of the largest letters or numerical characters representing particulars other than such particulars);
(iii)to make a visit or phone call to a user that is not asking to be solicited for the conclusion of a crypto-asset exchange contract (limited to a contract for conducting the exchange, etc. of crypto-assets; hereinafter the same applies in this item, the following item and item (vi)), and solicit such a user to conclude a crypto-asset exchange contract (excluding an act of a crypto-asset exchange service provider of soliciting a user in a continuous business relationship therewith (limited to a user that conducted the purchase and sale of crypto-assets or exchange with other crypto-assets on two or more occasions during the period of one year prior to the day of such solicitation) to conclude a crypto-asset exchange contract);
(iv)to solicit a user to conclude a crypto-asset exchange contract without obtaining confirmation from the user, prior to solicitation, regarding whether or not the user is willing to be solicited (excluding an act of a crypto-asset exchange service provider of soliciting a user in a continuous business relationship therewith (limited to a user that conducted the purchase and sale of crypto-assets or exchange with other crypto-assets on two or more occasions during the period of one year prior to the day of such solicitation) to conclude a crypto-asset exchange contract);
(v)to solicit a user to conclude a crypto-asset exchange contract, notwithstanding that the user has, in advance, manifested the intention not to conclude such crypto-asset exchange contract (including manifesting the intention that the user does not wish to accept any solicitation for the conclusion of such crypto-asset exchange contract);
(vi)solicit a user to conclude a crypto-asset exchange contract in a manner which is found to be inappropriate in light of the user's knowledge or experience, the state of the user's property, or the purpose for which a crypto-asset exchange contract is concluded;
(vii)to provide a user with a conclusive assessment of a particular that is uncertain or make a representation that could mislead the user into believing that a particular that is uncertain is actually certain;
(viii)while knowing that a user is likely to conduct the purchase and sale of a crypto-asset or exchange with another crypto-asset in violation of Article 185-22, paragraph (1), Article 185-23, paragraph (1) or Article 185-24, paragraph (1) or (2) of the Financial Instruments and Exchange Act (including a transaction conducted in relation to an act violating any of these provisions), to conduct such transaction or accepting entrustment, etc. thereof;
(ix)to conduct the purchase and sale of a crypto-asset or exchange with another crypto-asset, or make an offer or entrustment, etc. thereof, for the purpose of causing fluctuations in the quotations of crypto-assets, etc. (meaning the crypto-assets, etc. prescribed in Article 185-23, paragraph (1) of the Financial Instruments and Exchange Act; hereinafter the same applies in this item and the following item) or the figures calculated based on the quotations or transaction volumes thereof or for the purpose of increasing the transaction volumes thereof;
(x)to accept entrustment, etc. of the purchase and sale of a crypto-asset or exchange with another crypto-asset involving crypto-assets, etc., while knowing that it will result in manipulative quotations not reflecting actual market status through causing fluctuations in the quotations of crypto-assets, etc. or the figures calculated based on the quotations or transaction volumes thereof, or by increasing the transaction volumes thereof;
(xi)to transmit to a third party or utilize material information concerning crypto-assets that the crypto-asset exchange service provider uses or intends to use or concerning the crypto-asset exchange service provider, which is found to have an impact on users' decision on the purchase and sale of a crypto-asset or exchange with another crypto-asset (excluding cases where such material information is being made readily accessible to all users of the crypto-asset exchange services carried out by the crypto-asset exchange service provider), for the purpose of gaining own profit or for a profit for the third party (excluding such act that is necessary for the proper and steady provision of the crypto-asset exchange services conducted by the crypto-asset exchange service provider);
(xii)in cases of having accepted entrustment, etc. from a user for the purchase and sale of a crypto-asset or exchange with another crypto-asset, to conduct any purchase or sale of a crypto-asset or exchange with another crypto-asset at a price or volume equivalent to or more favorable than the price of the purchase or sale or the volume of the exchange subject to the entrustment, etc. before the effectuation of the purchase and sale or the exchange subject to the entrustment, etc. for the purpose of gaining own profit or for a profit for the third party; and
(xiii)beyond what is set forth in the preceding items, any conduct that is in violation of the articles of incorporation or other rules of a certified association for payment service providers (limited to those concerning the protection of users of crypto-asset exchange services or the proper and steady provision of crypto-asset exchange services; in the case of a corporation that has not joined a certified association for payment service providers, its internal rules of equivalent content) and that is likely to weaken the protection of users of crypto-asset exchange services or hinder the proper and steady provision of crypto-asset exchange services.
(Explanation Concerning the Characteristics of Crypto-Assets)
Article 21(1)When carrying out exchange of a crypto-asset, etc. with a user of the crypto-asset exchange services (excluding a crypto-asset exchange service provider, etc.; hereinafter the same applies in this Article), a crypto-asset exchange service provider must provide the users in advance with an explanation concerning the characteristics of crypto-assets by delivering documents or any other appropriate method.
(2)When providing the explanation prescribed in the preceding paragraph, a crypto-asset exchange service provider is to explain the following particulars:
(i)the fact that the crypto-asset is not the Japanese currency or a foreign currency;
(ii)when there is a risk of losses directly from fluctuations in the value of crypto-assets, that fact and the reasons therefor;
(iii)the fact that crypto-assets can be used for the purpose of paying consideration only with the consent of the person who receives payment of consideration;
(iv)the outline and the characteristics of the crypto-assets (if the value of the crypto-assets to be used in the business has not been guaranteed by a specific person, including that fact; or if the value has been guaranteed by a specific person, including the name, trade name or other name of that person and the details of the guarantee); and
(v)other particulars found to be relevant to the characteristics of the crypto-asset.
(3)When a crypto-asset exchange service provider carries out transactions pertaining to the exchange of crypto-assets, etc. with the users of the crypto-asset exchange services at its business office, the crypto-asset exchange service provider must post the particulars set forth in the items of the preceding paragraph at the service counter in a manner easily seen by the users.
(Provision of Information to Users)
Article 22(1)When carrying out transactions pertaining to crypto-asset exchange services with a user of the crypto-asset exchange services (excluding a crypto-asset exchange service provider, etc.; hereinafter the same applies in this Article), a crypto-asset exchange service provider must provide the user in advance with information about the following particulars by delivering documents or any other appropriate methods:
(i)the trade name and address of the crypto-asset exchange service provider;
(ii)the fact that it is a crypto-asset exchange service provider and the registration number of the crypto-asset exchange service provider;
(iii)the details of the transactions (if the transaction is the purchase and sale of a crypto-asset or exchange with another crypto-asset, including whether the crypto-asset exchange service provider will become the counterparty to effect the purchase and sale or exchange pertaining to the transaction with the customer, or whether it will conduct intermediary, brokerage or agency services to effect the purchase and sale or the exchange pertaining to the transaction);
(iv)when there is a risk of losses directly from a change to the status of the business or property of the crypto-asset exchange service provider or any other person, that fact and the reasons therefor;
(v)beyond what is set forth in paragraph (2), item (ii) of the preceding Article and the preceding item, when there is a risk of losses directly from material grounds that will affect the decision of the user regarding the transactions, that fact and the reasons therefor;
(vi)the amount or the maximum amount of the fees, remuneration, or costs to be paid by the user or the calculation method thereof;
(vii)the location and contact address of the business office that handles complaints from the users or provides consultations for the users;
(viii)the particulars specified as follows for the categories of cases respectively set forth therein:
(a)if there is a designated dispute resolution organization for crypto-asset exchange business:the trade name or other name of the designated dispute resolution organization for crypto-asset exchange business, which is the counterparty to the basic contract for execution of procedures specified in Article 63-12, paragraph (1), item (i) of the Act that the crypto-asset exchange service provider concludes;
(b)if there are no designated dispute resolution organizations for crypto-asset exchange business:the details of the complaint processing measures and dispute resolution measures specified in Article 63-12, paragraph (1), item (ii) of the Act carried out by the crypto-asset exchange service provider; and
(ix)other particulars found to be relevant to the details of the transactions.
(2)When providing information concerning the particulars set forth in the items of the preceding paragraph, a crypto-asset exchange service provider that conducts the exchange of crypto-assets, etc. must also provide information concerning the following particulars at the same time:
(i)if the crypto-asset exchange service provider accepts entrustment, etc. of the purchase and sale of a crypto-asset or exchange with another crypto-asset from a user of the crypto-asset exchange services, and it may become the counterparty to the purchase and sale or exchange subject to the entrustment, etc., that fact and the reasons therefor;
(ii)the trade name or name of the trust company, etc. with which the money of the user of the crypto-asset exchange services is entrusted pursuant to the provisions of Article 63-11, paragraph (1) of the Act; and
(iii)if the relevant transactions are carried out in an amount indicated in a foreign currency, the amount in the Japanese currency converted from that amount and the standard or the method used for the conversion.
(3)When providing information concerning the particulars set forth in the items of paragraph (1), a crypto-asset exchange service provider that conducts the management of crypto-assets must also provide information concerning the following particulars at the same time:
(i)the management method for the crypto-assets of the users of the crypto-asset exchange services under the provisions of the first sentence of Article 63-11, paragraph (2) of the Act, and the name, trade name or any other name of the person specified in (a) or (b) below according to the categories of methods set forth respectively therein:
(a)the method specified in Article 27, paragraph (1), item (i):the crypto-asset exchange service provider; or
(b)the method specified in Article 27, paragraph (1), item (ii):the third party prescribed in the same item;
(ii)the management method for performance-guarantee crypto-assets under the provisions of the first sentence of Article 63-11-2, paragraph (1) of the Act, and the name, trade name or any other name of the person specified in (a) or (b) below according to the categories of methods set forth respectively therein:
(a)the method specified in Article 29, paragraph (1), item (i):the crypto-asset exchange service provider; or
(b)the method specified in Article 29, paragraph (1), item (ii):the third party prescribed in the same item;
(4)When a crypto-asset exchange service provider concludes with a user of the crypto-asset exchange services a contract under which transactions pertaining to crypto-asset exchange services are carried out on an ongoing or recurring basis, the crypto-asset exchange service provider must provide the user with information about the following particulars by delivering documents or any other appropriate methods:
(i)the particulars set forth in items (i) through (viii) of the preceding paragraph and the particulars specified in (a) or (b) below according to the categories of cases set forth respectively therein:
(a)when conducting the exchange of crypto-assets, etc.:the particulars set forth in the items of paragraph (2); or
(b)when conducting the management of crypto-assets:the particulars set forth in the items of the preceding paragraph;
(ii)when a contract period is defined, the contract period;
(iii)handling of the cancellation of the contract (including calculation method for fees, remuneration, or costs); and
(iv)other particulars found to be relevant to the terms and conditions of the contract.
(5)When a crypto-asset exchange service provider has received money or crypto-asset from a user of the crypto-asset exchange services in relation to its crypto-asset exchange services, the crypto-asset exchange service provider must provide the user with information about the following particulars by delivering documents or any other appropriate methods:
(i)the trade name and the registration number of the crypto-asset exchange service provider;
(ii)the amount of the money or the quantity of the crypto-asset received from the user; and
(iii)the date of receipt.
(6)When a crypto-asset exchange service provider carries out transactions pertaining to crypto-asset exchange services with a user of the crypto-asset exchange services on an ongoing or recurring basis, the crypto-asset exchange service provider must provide the user with the transaction record and information about the amount of the money and the quantity of the crypto-asset of the user that it manages, for each period not exceeding three months, by delivering documents or any other appropriate methods.
(Other Measures to Ensure Protection of Users)
Article 23(1)A crypto-asset exchange service provider must take the following measures to ensure the protection of the users of the crypto-asset exchange services it provides and to ensure the proper and steady provision of the crypto-asset exchange services:
(i)measures to establish systems necessary for protecting the users and ensuring the provision of the crypto-asset exchange services in a proper and steady manner in relation to the crypto-asset exchange services it carries out, in accordance with the characteristics of the crypto-assets, the details of the transactions and other circumstances;
(ii)when the crypto-asset exchange service provider finds a possibility that a criminal act has been committed in relation to transactions pertaining to the crypto-asset exchange services it carries out, as there has been information provided by the investigative authority, etc. to the effect that the transactions pertaining to the crypto-asset exchange services were used for the purpose of committing a fraud or other criminal acts and in consideration of other circumstances, measures to suspend the relevant transactions pertaining to the crypto-asset exchange services, etc.;
(iii)if the crypto-asset exchange service provider carries out transactions pertaining to crypto-asset exchange services with the users by using a computer connected with electric telecommunication lines, appropriate measures to prevent the users from mistaking the crypto-asset exchange service provider for another person;
(iv)if the crypto-asset exchange service provider receives instructions regarding transactions pertaining to crypto-asset exchange services from the users by using a computer connected with electric telecommunication lines, appropriate measures to enable the users to easily confirm or correct the details of the instructions when operating the computer for the relevant instructions;
(v)necessary measures to avoid using crypto-assets that are found to be likely to hinder the protection of users or the proper and steady provision of the crypto-asset exchange services in light of the characteristics of crypto-assets and its own operational system;
(vi)necessary measures to appropriately manage material information concerning crypto-assets that the crypto-asset exchange service provider uses or intends to use in relation to the crypto-asset exchange services it carries out or concerning the crypto-asset exchange service provider, which is found to have an impact on users' decision on the purchase and sale of a crypto-asset or exchange with another crypto-asset (excluding cases where such material information is being made readily accessible to all users of the crypto-asset exchange services carried out by the crypto-asset exchange service provider);
(vii)measures to make public the balance sheet (including related notes) and profit and loss statement (including related notes) that the crypto-asset exchange service provider has submitted to the Commissioner of the Financial Services Agency by attaching them to the written report on the crypto-asset exchange services pursuant to the provisions of Article 37, paragraph (2);
(viii)if the crypto-asset exchange service provider borrows crypto-assets in relation to the crypto-asset exchange services it carries out, the following measures:
(a)measures to indicate that the borrowing of crypto-assets by the crypto-asset exchange service provider does not fall within the scope of management of crypto-assets and the crypto-assets borrowed by the crypto-asset exchange service provider are not managed separately from the crypto-assets of the crypto-asset exchange service provider pursuant to the provisions of Article 63-11, paragraph (2) of the Act, and that the counterparty to the borrowing does not have the right referred to in Article 63-19-2, paragraph (1) of the Act, in a manner that enables the counterparty to clearly and accurately recognize these particulars; and
(b)measures to establish a system for appropriately managing the outstanding balance of the obligations borne by the crypto-asset exchange service provider, so as to avoid a situation where the crypto-asset exchange service provider bears excessive obligations due to the borrowing of crypto-assets as compared to its ability to repay or faces difficulty in repaying these obligations, which would result in weakening the protection of users of crypto-asset exchange services or hindering the proper and steady provision of crypto-asset exchange services (including a system which requires the crypto-asset exchange service provider, whenever it borrows crypto-assets, to record the name of the counterparty, the type and quantity of the borrowed crypto-assets, and the repayment deadline).
(2)Beyond what is provided in the preceding paragraph, a crypto-asset exchange service provider that conducts the exchange of crypto-assets, etc. must take the following measures:
(i)measures to continuously indicate the following particulars so that the users of the crypto-asset exchange services can clearly and accurately recognize these particulars when they conduct the purchase and sale of a crypto-asset or exchange with another crypto-asset in relation to the crypto-assets used by the crypto-asset exchange service provider; and
(a)if the crypto-asset exchange service provider effects the purchase and sale of a crypto-asset or exchange with another crypto-asset by accepting the entrustment, etc. thereof from a user: the following particulars concerning the crypto-assets subject to the entrustment, etc. (if there are no such particulars, that fact):
1.the latest contract price in the purchase and sale of the crypto-asset to be effected by the crypto-asset exchange service provider by accepting the entrustment, etc. thereof from the user; and
2.the latest reference price announced by a certified association for payment service providers or a person designated by a certified association for payment service providers; and
(b)if the crypto-asset exchange service provider becomes the counterparty to the purchase and sale of a crypto-asset or exchange with another crypto-asset (excluding the case prescribed in (a)): the following particulars concerning the crypto-asset (if there are no such particulars, that fact);
1.the latest price for the purchase of the crypto-asset that is offered by the crypto-asset exchange service provider;
2.the latest price for the sale of the crypto-asset that is offered by the crypto-asset exchange service provider;
3.the latest contract price prescribed in (a) 1.; and
4.the latest reference price prescribed in (a) 2.;
(ii)if the crypto-asset exchange service provider provides multiple transaction methods for the users of the crypto-asset exchange services in relation to the exchange of crypto-assets, etc. that it conducts, the following particulars:
(a)measures to formulate, publicize, and implement a policy and method for executing orders from users for the exchange of crypto-assets, etc. under the best terms and conditions, for each type of crypto-asset;
(b)if the crypto-asset exchange service provider has effected the purchase and sale of a crypto-asset or exchange with another crypto-asset subject to entrustment, etc. from the user by acting as the counterparty to such transaction, without conducting intermediary, brokerage or agency services, measures to provide a user with information promptly by delivering documents or any other appropriate method with regard to that fact and the reason why it is compatible with the policy and method prescribed in (a) to conduct the purchase and sale or exchange; and
(c)measures to provide a user with information by delivering documents or any other appropriate method within 20 days from the day when the user requests information, if the user requests information within three months from the day when the crypto-asset exchange service provider has executed the order from the user for the exchange of crypto-assets, etc., with regard to the reason why the execution of the order is compatible with the policy and method prescribed in (a), as well as the type and quantity of the crypto-assets subject to the order, whether the order is to sell, purchase or exchange with another crypto-asset, the date and time of the receipt of the order, the date and time of the contract, and the method of execution;
(iii)measures to establish a system for appropriately managing information concerning the exchange of crypto-assets, etc. conducted by the crypto-asset exchange service provider and properly supervising the implementation status of the exchange of crypto-assets, etc. so that the interests of the users of the crypto-asset exchange services are not unjustly prejudiced due to the conflict of interests between the crypto-asset exchange service provider or any interested party thereof and the user of the crypto-asset exchange services upon the exchange of the crypto-assets, etc. conducted by the crypto-asset exchange service provider, and measures to formulate and publicize policies related to such system; and
(iv)measures, with regard to the exchange of crypto-assets, etc. conducted by the crypto-asset exchange service provider, to examine whether a user is not in violation of the provisions of Article 185-22, paragraph (1), Article 185-23, paragraph (1), or Article 185-24, paragraph (1) or (2) of the Financial Instruments and Exchange Act, in accordance with the trends and content of orders pertaining to the exchange of crypto-assets, etc. placed by the user of the crypto-asset exchange services, the situations of the exchange of crypto-assets, etc. or other circumstances, and if the user is suspected of violating these provisions, to suspend transactions pertaining to the crypto-asset exchange services with the user, or other measures necessary for preventing unfair acts in relation to the exchange of crypto-assets, etc.
(3)Beyond what is provided in paragraph (1), a crypto-asset exchange service provider that conducts the management of crypto-assets must take measures to formulate, publicize and implement the policies concerning the performance of obligations in cases where the crypto-asset exchange service provider is unable to perform all of the obligations in relation to the management of crypto-assets that the crypto-asset exchange service provider assumes against its users, out of the crypto-assets that the crypto-asset exchange service provider manages separately from its own crypto-assets under the provisions of Article 63-11, paragraph (2) of the Act, as a result of the leakage, loss, or damage of information necessary for transferring crypto-assets or due to other grounds (policies include actions necessary for performing the relevant obligations and times to take those actions).
(Internal Rules)
Article 24A crypto-asset exchange service provider must provide for internal rules, etc. concerning the measures to ensure the protection of the users of the crypto-asset exchange services and the proper and steady provision of the crypto-asset exchange services (including the explanation of the details of the measures taken by the crypto-asset exchange service provider as specified in Article 63-12, paragraph (1) of the Act and the measures to prevent crimes), in accordance with the details and means of its business, and establish a system for providing training to employees, a system for providing guidance to the person to whom business is entrusted, and other systems sufficient to ensure that the business is operated based on those internal rules, etc.
(Special Provisions for Crypto-Asset Margin Transactions)
Article 25(1)When carrying out crypto-asset margin transactions with a user of the crypto-asset exchange services (excluding a crypto-asset exchange service provider, etc.; hereinafter the same applies in this paragraph through paragraph (4)), a crypto-asset exchange service provider must provide the user in advance with information about the following particulars in addition to the information under the provisions of Article 22, paragraphs (1) through (3) by delivering documents or any other appropriate methods:
(i)the amount of security deposit to be deposited by the user for the crypto-asset margin transactions and the calculation method thereof, as well as the method whereby the user deposits the security deposit and receives restitution thereof;
(ii)if there is a risk that the amount of loss relating to the crypto-asset margin transactions may exceed the amount of security deposit set forth in the preceding item, such fact and the reasons therefor;
(iii)the amount of obligations for the credit granted for the crypto-asset margin transactions, the due date for the payment, and the method of settlement; and
(iv)other particulars found to be relevant to the details of the crypto-asset margin transactions.
(2)When a crypto-asset exchange service provider concludes with a user of the crypto-asset exchange services a contract under which crypto-asset margin transactions are carried out on an ongoing or recurring basis, the crypto-asset exchange service provider must provide the user with information about the following particulars in addition to the information under the provisions of Article 22, paragraph (4) by delivering documents or any other appropriate methods:
(i)the particulars set forth in items (i) through (iii) of the preceding paragraph; and
(ii)other particulars found to be relevant to the terms and conditions of the contract.
(3)When a crypto-asset exchange service provider has received a security deposit for crypto-asset margin transactions from a user of the crypto-asset exchange services, the crypto-asset exchange service provider must provide the user with information about the following particulars in addition to the information under the provisions of Article 22, paragraph (5) by delivering documents or any other appropriate methods:
(i)the fact that the money received from the user is a security deposit for crypto-asset margin transactions; and
(ii)the type of crypto-asset margin transactions to which the security deposit pertains and the type of crypto-assets which are subject to crypto-asset margin transactions.
(4)When a crypto-asset exchange service provider carries out crypto-asset margin transactions with a user of the crypto-asset exchange services on an ongoing or recurring basis, the crypto-asset exchange service provider must provide the user with a description of the unsettled account and the loss or gain on valuation of the crypto-asset margin transactions in addition to the information under the provisions of Article 22, paragraph (6), for each period not exceeding three months, by delivering documents or any other appropriate methods.
(5)When carrying out crypto-asset margin transactions, a crypto-asset exchange service provider must take the following measures:
(i)necessary measures to ensure that, when the amount of security deposit for crypto-asset margin transactions deposited by a user (limited to an individual; the same applies in item (iii)) of the crypto-asset exchange services falls short of the amount obtained by multiplying the amount of crypto-asset margin transactions that the user intends to carry out or is carrying out by 50 percent, the crypto-asset exchange service provider will not carry out the crypto-asset margin transactions or continue to grant credit for the crypto-asset margin transactions without having the user deposit the amount of such shortfall;
(ii)necessary measures to ensure that, when the amount of security deposit for crypto-asset margin transactions deposited by a user (excluding an individual) of the crypto-asset exchange services falls short of the amount obtained by multiplying the amount of crypto-asset margin transactions that the user intends to carry out or is carrying out by the assumed crypto-assets risk ratio for the crypto-assets or the combination of crypto-assets subject to the crypto-asset margin transactions (meaning the ratio calculated in accordance with the method designated by the Commissioner of the Financial Services Agency as the ratio of the amount equivalent to a risk that may arise due to fluctuations in the quotations of such crypto-assets against the amount of principal; the same applies in this item ) (for a crypto-asset exchange service provider that does not use the assumed crypto-assets risk ratio, the amount obtained by multiplying the amount of the crypto-asset margin transactions by 50 percent), the crypto-asset exchange service provider will not carry out the crypto-asset margin transactions or continue to grant credit for the crypto-asset margin transactions without having the user deposit the amount of such shortfall;
(iii)measures to establish a sufficient management system for conducting settlement procedures for crypto-asset margin transactions to be performed when the amount of losses that would arise to a user if the user settled the crypto-asset margin transactions carried out on the user's own account reaches the amount calculated by the method of calculation agreed on with the user in advance (such procedures are referred to as a "loss-cutting transaction" in this item), and to conduct a loss-cut transaction in such case; and
(iv)beyond what is set forth in the preceding three items, measures to establish, in relation to the crypto-asset margin transactions which the crypto-asset exchange service provider carries out, systems necessary for protecting the users of business pertaining to the crypto-asset margin transactions and ensuring the operation of the business in a proper and steady manner, in accordance with the details of the crypto-asset margin transactions and other circumstances.
(6)The security deposit prescribed in paragraph (1), paragraph (3), and the preceding paragraph may be satisfied by crypto-assets.In this case, the phrase "as well as" in paragraph (1), item (i) is deemed to be replaced with ", the type and quantity of crypto-assets which may be appropriated to the security deposit, the amount which may be appropriated, and the calculation methods of these, as well as."
(7)The collateral value of crypto-assets where all or part of the security deposit for crypto-asset margin transactions to be received by a crypto-asset exchange service provider is substituted with crypto-assets under the provisions of the preceding paragraph is an amount specified by the rules of the certified association for payment service providers (limited to the rules designated by the Commissioner of the Financial Services Agency).
(Management of Users' Money)
Article 26(1)When a crypto-asset exchange service provider places money of the users of the crypto-asset exchange services in the trust under the provisions of Article 63-11, paragraph (1) of the Act, the trust must be a money trust created with a trust company, etc. (hereinafter referred to as a "segregated user management trust"), and a contract pertaining to a segregated user management trust must satisfy all of the following requirements:
(i)the crypto-asset exchange service provider is the settlor, a trust company, etc. is the trustee, and a user in relation to transactions pertaining to the crypto-asset exchange services carried out by the crypto-asset exchange service provider is the beneficiary of the principal;
(ii)agents for the beneficiary are appointed, and at least one of those agents for the beneficiary is an attorney, a legal professional corporation, a certified public accountant (including a foreign certified public accountant prescribed in Article 16-2, paragraph (5) of the Certified Public Accountant Act (Act No. 103 of 1948); the same applies hereinafter), an audit corporation, a tax accountant, a tax accountant corporation, or a person designated by the Commissioner of the Financial Services Agency (hereinafter referred to as an "attorney, etc." in this paragraph);
(iii)if multiple segregated user management trusts are carried out, the same agent for the beneficiary is to be appointed for those multiple segregated user management trusts;
(iv)if the crypto-asset exchange service provider comes to fall under any of the following requirements, only the agent for the beneficiary who is an attorney, etc. exercises its authority (excluding the case where the relevant agent for the beneficiary admits the exercise of the authority by another agent for the beneficiary):
(a)when the crypto-asset exchange service provider has had its registration referred to in Article 63-2 of the Act revoked under the provisions of Article 63-17, paragraph (1) or (2) of the Act;
(b)when the crypto-asset exchange service provider has filed a petition for commencement of bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or special liquidation (in the case of a foreign crypto-asset exchange service provider, when it has filed a petition for commencement of bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or special liquidation in Japan or has filed the same type of petition in the state where its head office is located, pursuant to the laws and regulations of that state);
(c)when the crypto-asset exchange service provider has discontinued all of the crypto-asset exchange services (in the case of a foreign crypto-asset exchange service provider, when it has discontinued the crypto-asset exchange services at all business offices it had established in Japan; hereinafter the same applies in (c)) or has dissolved (in the case of a foreign crypto-asset exchange service provider, when it has commenced liquidation of the business offices it had established in Japan; hereinafter the same applies in (c)), or when the crypto-asset exchange service provider has given a public notice of the discontinuation of all of the crypto-asset exchange services or the dissolution under the provisions of Article 63-20, paragraph (3) of the Act; and
(d)when the crypto-asset exchange service provider has received an order to suspend all or part of the crypto-asset exchange services under the provisions of Article 63-17, paragraph (1) of the Act;
(v)except when the segregated user management trust is a money trust created with a financial institution engaging in the trust business with a contractual agreement on principal protection, the investment of money belonging to the trust property is made only by methods equivalent to the methods prescribed in Article 141-2, paragraph (1), item (v) of the Cabinet Office Order on Financial Instruments Business (Cabinet Office Order No. 52 of 2007);
(vi)if the appraised value of the principal of the trust property is less than the required amount of segregated user management (meaning the total of the individual amounts of segregated user management (meaning the amount of the users' money that the crypto-asset exchange service provider manages in connection with its crypto-asset exchange services, as calculated for each user; the same applies in item (xiv) and the following paragraph); hereinafter the same applies in this Article), money in an amount equivalent to the shortfall amount is added to the trust property by the crypto-asset exchange service provider, within two business days counting from the day immediately after the day when the shortfall takes place;
(vii)the crypto-asset exchange service provider calculates the appraisal value of principal of the trust property based on the market value thereof (excluding a case in which the segregated user management trust is a money trust created with a financial institution engaging in the trust business with a contractual agreement on principal protection);
(viii)if the segregated user management trust is a money trust created with a financial institution engaging in the trust business with a contractual agreement on principal protection, the appraised value of the principal of the trust property therein is used as the amount of the principal of such money trust;
(ix)in cases other than the following cases, all or part of the contract pertaining to a segregated user management trust may not be terminated:
(a)if the appraised value of the principal of the trust property exceeds the required amount of segregated user management, when intending to terminate all or part of the contract pertaining to the segregated user management trust to the extent of that excess amount; and
(b)when intending to terminate all or part of the contract pertaining to the segregated user management trust for the purpose of entrusting it as a trust property pertaining to another segregated user management trust;
(x)the trust property pertaining to the termination of all or part of the contract pertaining to the segregated user management trust effected in a case set forth in (a) or (b) of the preceding item is to be vested in the settlor;
(xi)if the crypto-asset exchange service provider comes to fall under any of item (iv), (a) through (d), the crypto-asset exchange service provider may not give the trustee any investment instruction on the trust property, unless otherwise specifically permitted by an agent for the beneficiary who is an attorney, etc.;
(xii)if an agent for the beneficiary who is an attorney, etc. finds it necessary, the beneficial right of the users is exercised collectively for all users by the agent for the beneficiary;
(xiii)if the beneficial right of the users has been exercised collectively by an agent for the beneficiary who is an attorney, etc., the trust agreement pertaining to the beneficial right may be ended;
(xiv)the amount to be paid to each user when the user exercises the beneficial right is to be the amount obtained by multiplying the realized amount of principal (meaning the amount obtained by realizing the principal of the trust property under the segregated user management trust (or the amount of principal if the segregated user management trust is a money trust created with a financial institution engaging in the trust business with a contractual agreement on principal protection); the same applies in the following item) as of the day of the exercise of the beneficial right by the proportion of the individual amount of segregated user management pertaining to that user against the required amount of segregated user management as of that date (if the amount thus obtained exceeds the individual amount of segregated user management, the individual amount of segregated user management); and
(xv)if the realized amount of principal as of the day on which a user exercises the beneficial right exceeds the required amount of segregated user management, that excess amount is to be vested in the settlor.
(2)A crypto-asset exchange service provider must calculate the individual amount of segregated user management and the required amount of segregated user management every business day.
(Management of Users' Crypto-Assets)
Article 27(1)When a crypto-asset exchange service provider manages the crypto-assets of the users based on the provisions of the first sentence of Article 63-11, paragraph (2) of the Act, the crypto-asset exchange service provider must manage the crypto-assets in the method specified in the following items for the categories of crypto-assets respectively set forth therein:
(i)crypto-assets that the crypto-asset exchange service provider manages by itself:the method to clearly divide the crypto-assets of the users and its own crypto-assets and manage the crypto-assets of the users in a manner wherein each user's crypto-assets can be identified immediately (including a manner wherein the quantity of each user's crypto-assets can be identified immediately in one's books; the same applies in the following item); or
(ii)crypto-assets that the crypto-asset exchange service provider has a third party manage:the method to have the third party clearly divide the crypto-assets of the users and other crypto-assets and have the third party manage the crypto-assets of the users in a manner wherein each user's crypto-assets can be identified immediately.
(2)The requirement specified by Cabinet Office Order as prescribed in the second sentence of Article 63-11, paragraph (2) of the Act is that the amount of crypto-assets of the users is the minimum amount of crypto-assets that are required to be managed by a method other than the methods specified in the following paragraph for ensuring the convenience of users of the crypto-asset exchange services and achieving smooth provision of the crypto-asset exchange services, in light of the situation of the crypto-asset exchange services it carried out (limited to cases where the equivalent amount converted to the Japanese currency of the quantity of the crypto-assets does not exceed the amount obtained by multiplying the equivalent amount converted to the Japanese currency of the quantity of the crypto-assets of the users under its management by five percent).
(3)The methods specified by the Cabinet Office Order as prescribed in the second sentence of Article 63-11, paragraph (2) of the Act as being less likely to weaken the protection of users are the methods specified in the following items according to the categories of cases respectively set forth therein:
(i)if the crypto-asset exchange service provider manages the crypto-assets by itself:a method to manage information necessary for transferring crypto-assets of the users of the crypto-asset exchange services by recording it on an electronic device always disconnected from the internet, an electronic or magnetic recording medium or other recording medium (including a document or any other object), or to manage such information by taking technical security control measures equivalent to the former; and
(ii)if the crypto-asset exchange service provider has a third party manage the crypto-assets:a method reasonably found to ensure the protection of users at an equivalent level to the level in the case of the management by the crypto-asset exchange service provider itself with regard to the preservation of crypto-assets of the users of the crypto-asset exchange services.
(Audit of Separate Management of Users' Property)
Article 28(1)A crypto-asset exchange service provider (limited to a person who conducts the acts set forth in Article 2, paragraph (7), item (iii) of the Act or the management of crypto-assets) must have a certified public accountant or an audit corporation audit the status of its management under the provisions of Article 63-11, paragraphs (1) and (2) of the Act (hereinafter this audit is referred to as an "audit of separate management") based on the provisions of paragraph (3) of the same Article, at least once each year, in accordance with the rules designated by the Commissioner of the Financial Services Agency.
(2)The following persons may not conduct an audit of separate management:
(i)a person who may not conduct the services related to auditing under the provisions of Article 63-11, paragraph (3) of the Act, pursuant to the provisions of the Certified Public Accountants Act;
(ii)a person who receives remuneration for a service other than the service of a certified public accountant or an audit corporation, on a regular basis, from a subsidiary company (meaning the subsidiary company prescribed in Article 2, item (iii) of the Companies Act) of the crypto-asset exchange service provider or from any of its director, accounting advisor, company auditor or executive officer, or the spouse of that person; or
(iii)an audit corporation in which at least one-half of members are persons set forth in the preceding item.
(Management of Performance-Guarantee Crypto-Assets)
Article 29(1)When a crypto-asset exchange service provider manages performance-guarantee crypto-assets based on the provisions of the first sentence of Article 63-11-2, paragraph (1) of the Act, the crypto-asset exchange service provider must manage the performance-guarantee crypto-assets in the method specified in the following items for the categories of performance-guarantee crypto-assets respectively set forth therein:
(i)performance-guarantee crypto-assets that the crypto-asset exchange service provider manages by itself:the method to clearly divide the performance-guarantee crypto-assets from the crypto-assets of the users and its own crypto-assets other than performance-guarantee crypto-assets and manage the performance-guarantee crypto-assets in a manner wherein the performance-guarantee crypto-assets can be identified immediately (including a manner wherein the quantity of the performance-guarantee crypto-assets can be identified immediately in one's books; the same applies in the following item); or
(ii)performance-guarantee crypto-assets that the crypto-asset exchange service provider has a third party manage:the method to have the third party clearly divide the performance-guarantee crypto-assets and other crypto-assets and have the third party manage the performance-guarantee crypto-assets in a manner wherein performance-guarantee crypto-assets can be identified immediately.
(2)The methods specified by the Cabinet Office Order as prescribed in the second sentence of Article 63-11-2, paragraph (1) of the Act as being less likely to weaken the protection of users are the methods specified in the following items according to the categories of cases respectively set forth therein:
(i)if the crypto-asset exchange service provider manages the performance-guarantee crypto-assets by itself:a method to manage information necessary for transferring performance-guarantee crypto-assets by recording it on an electronic device always disconnected from the internet, an electronic or magnetic recording medium or other recording medium (including a document or any other object), or to manage such information by taking technical security control measures equivalent to the former; and
(ii)if the crypto-asset exchange service provider has a third party manage the performance-guarantee crypto-assets:a method reasonably found to ensure the protection of users at an equivalent level to the level in the case of the management by the crypto-asset exchange service provider itself with regard to the preservation of performance-guarantee crypto-assets.
(Audit of Separate Management of Performance-Guarantee Crypto-Assets)
Article 30The provisions of Article 28 apply mutatis mutandis in the case where the provisions of Article 63-11, paragraph (3) of the Act apply mutatis mutandis pursuant to Article 63-11-2, paragraph (2) of the Act.In this case, the term "audit of separate management" in Article 28 is deemed to be replaced with "audit of separate management of performance-guarantee crypto-assets."
(Persons with Expert Knowledge and Experience in Particulars Related to Consumer Affairs)
Article 31The persons specified by Cabinet Office Order as prescribed in Article 63-12, paragraph (4) of the Act are those who have any of the following qualifications and have engaged in the business of responding to consumer affairs consultations (meaning the consumer affairs consultations prescribed in Article 13, paragraph (3), item (v), (a) of the Consumer Contract Act (Act No. 61 of 2000)) for a period of not less than five years in total:
(i)the qualification as the consumer-specialized counselor granted by the National Consumer Affairs Center of Japan;
(ii)the qualification as the consumer advisor granted by the Japan Industrial Association; or
(iii)the qualification as the consumer consultant granted by the Japan Consumers' Association.
(Complaint Processing Measures and Dispute Resolution Measures in Relation to Crypto-Asset Exchange Services)
Article 32(1)The measures specified by Cabinet Office Order as complaint processing measures prescribed in Article 63-12, paragraph (4) of the Act are any of the following:
(i)to take all of the following measures:
(a)to establish a system for business operation sufficient to execute the business of processing complaints related to crypto-asset exchange services (meaning the complaints related to crypto-asset exchange services out of the complaints related to the funds transfer service, etc. prescribed in Article 2, paragraph (22) of the Banking Act as applied mutatis mutandis pursuant to Article 101, paragraph (1) of the Act following the deemed replacement of terms; hereinafter the same applies in this paragraph and paragraph (3)) in a fair and appropriate manner;
(b)to establish internal rules for the fair and appropriate execution of the business of processing complaints related to crypto-asset exchange services (limited to the internal rules including the provisions clarifying the sharing of responsibility in the company with regard to the relevant business);
(c)to inform the users of the entity to which complaints related to crypto-asset exchange services are to be made and make public the system for business operations referred to in (a) and the internal rules referred to in (b) above;
(ii)to seek to process complaints related to crypto-asset exchange services through the resolution of complaints carried out by the certified association for payment service providers;
(iii)to seek to process complaints related to crypto-asset exchange services through the mediation prescribed in Article 19, paragraph (1) or Article 25 of the Consumer Basic Act (Act No. 78 of 1968);
(iv)to seek to process complaints related to crypto-asset exchange services through complaint processing procedures carried out by a person who has obtained any of the designations set forth in the items of Article 24 of the Order; or
(v)to seek to process complaints related to crypto-asset exchange services through complaint processing procedures carried out by a corporation (meaning the corporation prescribed in Article 99, paragraph (1), item (i) of the Act; the same applies in item (iv) of the following paragraph) that has a financial basis and a personnel structure sufficient to execute the business of processing complaints related to crypto-asset exchange services in a fair and appropriate manner.
(2)The measures specified by Cabinet Office Order as dispute resolution measures prescribed in Article 63-12, paragraph (5) of the Act are any of the following:
(i)to seek to resolve disputes related to crypto-asset exchange services (meaning the disputes related to crypto-asset exchange services out of the disputes related to the funds transfer service, etc. prescribed in Article 2, paragraph (23) of the Banking Act as applied mutatis mutandis pursuant to Article 101, paragraph (1) of the Act following the deemed replacement of terms; hereinafter the same applies in this Article) through the mediation by an organization prescribed in the association rules prescribed in Article 33, paragraph (1) of the Attorney Act (Act No. 205 of 1949) or in the rules established under the provisions of those association rules or through the arbitration procedures carried out by that organization;
(ii)to seek to resolve disputes related to crypto-asset exchange services through the mediation prescribed in Article 19, paragraph (1) or Article 25 of the Consumer Basic Act or through the agreement prescribed in the same Article;
(iii)to seek to resolve disputes related to crypto-asset exchange services through dispute resolution procedures carried out by a person who has obtained any of the designations set forth in the items of Article 24 of the Order; or
(iv)to seek to resolve disputes related to crypto-asset exchange services through dispute resolution procedures carried out by a corporation that has a financial basis and a personnel structure sufficient to execute the business of resolving disputes related to crypto-asset exchange services in a fair and steady manner.
(3)Notwithstanding the provisions of the preceding two paragraphs (limited to paragraph (1), item (v) and item (iv) of the preceding paragraph), a crypto-asset exchange service provider must not seek to process complaints related to crypto-asset exchange services or to resolve disputes related to crypto-asset exchange services through the procedures carried out by a corporation falling under any of the following items:
(i)a corporation that has been sentenced to a fine under the provisions of the Act or the Attorney Act, and for whom five years have not passed since the day when the execution of the sentence terminated or the day on which such person is no longer subject to the execution of the sentence;
(ii)a corporation whose designation under Article 99, paragraph (1) of the Act has been revoked under the provisions of Article 100, paragraph (1) of the Act, and for whom five years have not passed from the date of the revocation, or a corporation whose designation set forth in the items of Article 24 of the Order has been revoked, and for whom five years have not passed from the date of the revocation;
(iii)a corporation that has, in its officers conducting the business thereof (if the officer is a corporation, including the person to perform its duties; hereinafter the same applies in this item), those falling under either of the following:
(a)a person who has been sentenced to imprisonment without work or heavier punishment or has been sentenced under the provisions of the Act or the Attorney Act, and for whom five years have not passed since the day when the execution of the punishment terminated or the person ceased to be subject to the execution of the sentence; or
(b)a person who was an officer of a corporation whose designation under Article 99, paragraph (1) of the Act was revoked under the provisions of Article 100, paragraph (1) of the Act, within one month before the date of the revocation, and for whom five years have not passed from the date of the revocation; or a person who was an officer of a corporation whose designation set forth in the items of Article 24 of the Order was revoked, within one month before the date of the revocation, and for whom five years have not passed from the date of the revocation.
Chapter III Supervision
(Preparation and Keeping of Books and Documents Pertaining to Crypto-Asset Exchange Services)
Article 33(1)The books and documents pertaining to crypto-asset exchange services as prescribed in Article 63-13 of the Act are the following books and documents:
(i)transaction records pertaining to crypto-asset exchange services;
(ii)a general ledger;
(iii)a customer ledger (limited to the case where the crypto-asset exchange service provider concludes a contract with the users of the crypto-asset exchange services under which transactions pertaining to crypto-asset exchange services are carried out on an ongoing or recurring basis);
(iv)order forms;
(v)records of the amount of the money of the users of crypto-asset exchange services that the crypto-asset exchange service provider manages on each business day (limited to a person who conducts the acts set forth in Article 2, paragraph (7), item (iii) of the Act);
(vi)records of the amount of trust property pertaining to a segregated user management trust on each business day (limited to a person who conducts the acts set forth in Article 2, paragraph (7), item (iii) of the Act);
(vii)records of the quantity of the crypto-assets of the users that the crypto-asset exchange service provider manages on each business day (limited to a person who conducts the management of crypto-assets);
(viii)records concerning the results of the audit of separate management (limited to a person who conducts the acts set forth in Article 2, paragraph (7), item (iii) of the Act or the management of crypto-assets); and
(ix)records concerning the results of the audit of separate management of performance-guarantee crypto-assets (limited to a person who conducts the management of crypto-assets).
(2)A crypto-asset exchange service provider must keep the books and documents set forth in items (i) through (iii) of the preceding paragraph for at least ten years from the day of the closing of the books, the books and documents set forth in item (iv) of the same paragraph for at least seven years from the day of the closing of the books, and the books and documents set forth in items (v) through (ix) of the same paragraph for at least five years from the day of the closing of the books.
(3)The books and documents set forth in the items of paragraph (1) must be kept in Japan; provided, however, that this does not apply if the relevant books and documents are prepared at a business office established in a foreign state and when copies thereof are kept in Japan without delay after they are prepared, or when the books and documents are prepared in the form of an electronic or magnetic record (meaning a record made in an electronic form, a magnetic form or any other form not recognizable to human perception, which is used in information processing by computers; hereinafter the same applies in this paragraph and Article 38, paragraph (2), items (iii) and (iv)) and are kept under a situation where the particulars recorded in those electronic or magnetic records can be inspected without delay at a business office established in Japan.
(Transaction Records Pertaining to Crypto-Asset Exchange Services)
Article 34(1)The transaction records pertaining to crypto-asset exchange services prescribed in paragraph (1), item (i) of the preceding Article are as follows:
(i)a transaction diary;
(ii)transaction records for intermediary or agency services; and
(iii)the business' own ledger.
(2)The following particulars must be stated in the transaction diary referred to in item (i) of the preceding paragraph, with regard to the acts set forth in Article 2, paragraph (7), items (i) and (ii) of the Act (excluding acts pertaining to an intermediary or agency service):
(i)the date of the contract;
(ii)the name of the user of the crypto-asset exchange services (limited to the case where transactions pertaining to crypto-asset exchange services are carried out with the users on an ongoing or recurring basis);
(iii)whether it is a transaction for itself or a brokerage;
(iv)whether it is a sale or purchase of a crypto-asset or an exchange with another crypto-asset;
(v)the name of the crypto-asset;
(vi)the quantity of the crypto-asset;
(vii)the contract price or unit price and the amount (in the case of an exchange with another crypto-asset, the name of that other crypto-asset and the price equivalent to the contract price);
(viii)the name of the counterparty (limited to the case of a brokerage);
(ix)the amount of the fees, remuneration or any other consideration receivable in relation to the transaction (limited to the case of a brokerage); and
(x)in the case of a crypto-asset margin transaction, the following particulars;
(a)the fact that it is a crypto-asset margin transaction;
(b)whether it is a new transaction or settlement transaction;
(c)the amount of obligation for the credit granted, and the due date for the payment; and
(d)the amount of the fees, remuneration or any other consideration receivable in relation to the crypto-asset margin transaction.
(3)The following particulars must be stated in the transaction record pertaining to an intermediary or agency service referred to in paragraph (1), item (ii), with regard to the acts set forth in Article 2, paragraph (7), item (ii) of the Act (limited to acts pertaining to an intermediary or agency service):
(i)the date when the intermediary or agency service was provided;
(ii)the name of the user of the crypto-asset exchange services;
(iii)whether it is an intermediary or agency service;
(iv)the details of the intermediary or agency service;
(v)the name of the crypto-asset;
(vi)the quantity of the crypto-asset;
(vii)the contract price or unit price and the amount (in the case of an exchange with another crypto-asset, the name of that other crypto-asset and the price equivalent to the contract price);
(viii)the amount of the fees, remuneration or any other consideration receivable in relation to the intermediary or agency service; and
(ix)in the case of a crypto-asset margin transaction, the following particulars;
(a)the fact that it is a crypto-asset margin transaction;
(b)whether it is a new transaction or settlement transaction; and
(c)the amount of obligation for the credit granted, and the due date for the payment; and
(d)the amount of the fees, remuneration or any other consideration receivable in relation to the crypto-asset margin transaction.
(4)The following particulars must be stated in the business' own ledger referred to in paragraph (1), item (iii):
(i)the name of the crypto-asset;
(ii)the date of the contract;
(iii)the name of the counterparty (limited to the case of a transaction wherein the counterparty is selected on its own);
(iv)whether it is a sale or purchase of a crypto-asset or an exchange with another crypto-asset;
(v)the quantity of the crypto-asset; and
(vi)the balance of the amount of the money and the quantity of the crypto-asset that it holds.
(Customer Ledger)
Article 35(1)The customer ledger prescribed in Article 33, paragraph (1), item (iii) consists of the following:
(i)a user ledger (limited to a person who conducts the exchange of crypto-assets, etc.);
(ii)a book on the description of the crypto-asset management (limited to a person who conducts the management of crypto-assets);
(2)The user ledger referred to in item (i) of the preceding paragraph must be prepared for each user of the crypto-asset exchange services and the following particulars must be stated therein:
(i)the name of the user;
(ii)the deposit and withdrawal of money and the dates thereof, and the outstanding balance;
(iii)the name of the crypto-asset;
(iv)whether it is a transaction for itself, intermediary, brokerage or agency service;
(v)whether it is a sale or purchase of a crypto-asset or an exchange with another crypto-asset;
(vi)the date of the contract;
(vii)the quantity of the crypto-asset; and
(viii)the contract price or unit price and the amount (in the case of an exchange with another crypto-asset, the name of that other crypto-asset and the price equivalent to the contract price).
(ix)in the case of a crypto-asset margin transaction, the following particulars;
(a)the fact that it is a crypto-asset margin transaction;
(b)the amount of obligation for the credit granted, and the due date for the payment; and
(c)particulars concerning a security deposit (the type of security deposit, the dates of receipt or return, and the amount or quantity).
(3)The book on the description of the crypto-asset management referred to in paragraph (1), item (ii) must be prepared for each user of the crypto-asset exchange services and the following particulars must be stated therein:
(i)the name of the user;
(ii)whether it is an acceptance or withdrawal and the date thereof, and the outstanding balance;
(iii)the name of a person who manages the user's crypto-asset;
(iv)the name of the crypto-asset; and
(v)the quantity of the crypto-asset.
(Order Forms)
Article 36The following particulars must be stated in the order form referred to in Article 33, paragraph (1), item (iv), with regard to the acts set forth in Article 2, paragraph (7), items (i) and (ii) of the Act:
(i)whether it is a transaction for itself, intermediary, brokerage or agency service (it is a transaction for itself in the case of the placement of an order for a self-transaction);
(ii)the name of the user of the crypto-asset exchange services;
(iii)the name of the crypto-asset;
(iv)whether it is for a sale or purchase of a crypto-asset or an exchange with another crypto-asset;
(v)the volume of the order received and the volume of the order placed;
(vi)the volume of the contract executed;
(vii)whether it is a limit order or market order (in the case of a limit order, the price and valid period of the order (excluding any order of which the valid period is the day of such order) are included);
(viii)the date and time of receipt and placement of the order;
(ix)the date and time of the contract;
(x)the contract price or unit price and the amount (in the case of an exchange with another crypto-asset, the name of that other crypto-asset and the price equivalent to the contract price);
(xi)in the case of a crypto-asset margin transaction, the following particulars;
(a)the fact that it is a crypto-asset margin transaction;
(b)whether it is a new transaction or settlement transaction; and
(c)the amount of obligation for the credit granted, and the due date for the payment;
(xii)if the transaction did not come into effect, such fact and the cause thereof, in lieu of the particulars set forth in items (vi), (ix), and (x);
(Reports on Crypto-Asset Exchange Services)
Article 37(1)The written report on crypto-asset exchange services referred to in Article 63-14, paragraph (1) of the Act must be prepared using appended Form 11 (in the case of a foreign crypto-asset exchange service provider, appended Form 12) by separating it into a business summary and a document containing the status of income and expenditure pertaining to the crypto-asset exchange services and must be submitted to the Commissioner of the Financial Services Agency within three months from the last day of the relevant business year (in the case of a foreign crypto-asset exchange service provider, within four months from the last day of the relevant business year).
(2)When intending to submit the written report referred to in the preceding paragraph, a crypto-asset exchange service provider must submit it to the Commissioner of the Financial Services Agency by attaching the latest balance sheet (including the related notes) and profit and loss statement (including the related notes), and in the case of a crypto-asset exchange service provider that conducts the management of crypto-assets, also attaching an audit report prepared by a certified public accountant or audit corporation regarding these documents.
(Reports on the Management of Users' Property)
Article 38(1)The written report referred to in Article 63-14, paragraph (2) of the Act must be prepared using appended Form 13 for each period dividing the business year by three months (hereinafter referred to as the "subject period" in this Article) and must be submitted to the Commissioner of the Financial Services Agency within one month from the last day of the subject period.
(2)When intending to submit the written report referred to in the preceding paragraph, a crypto-asset exchange service provider must submit it to the Commissioner of the Financial Services Agency by attaching documents specified in the following items for the categories of cases respectively set forth therein; provided, however, that in the case of the documents specified in item (i), it is sufficient to submit them within two months from the last day of the subject period pertaining to the written report:
(i)when conducting the management of crypto-assets:the balance sheet (including related notes) and profit and loss statement (including related notes) pertaining to the subject period;
(ii)when managing the money of the users of the crypto-asset exchange services:a certificate of the balance issued by the trust company, etc.;
(iii)when managing the crypto-assets of the users of the crypto-asset exchange services by the method specified in the items of Article 27, paragraph (1):a print-out of the information on the balance of the crypto-asset recorded in electronic or magnetic records or other document proving the balance of the crypto-asset;
(iv)when managing performance-guarantee crypto-assets by the methods specified in the items of Article 29, paragraph (1):a print-out of the information on the balance of the performance-guarantee crypto-assets recorded in electronic or magnetic records or other document proving the balance of the performance-guarantee crypto-assets;
(v)when undergoing an audit of separate management:a copy of the latest report submitted by the certified public accountant or audit corporation; and
(vi)when undergoing an audit of separate management of performance-guarantee crypto-assets:a copy of the latest report submitted by the certified public accountant or audit corporation.
(Method of Public Notice)
Article 39The public notice under the provisions of Article 63-17, paragraph (2) and Article 63-19 of the Act is to be given in the Official Gazette.
Chapter IV Miscellaneous Provisions
(Notification of Discontinuation of Business)
Article 40(1)A person intending to make a notification under the provisions of Article 63-20, paragraph (1) of the Act must submit to the Commissioner of the Financial Services Agency a written notice prepared using appended Form 14.
(2)The following particulars must be stated in the written notice referred to in the preceding paragraph:
(i)the trade name;
(ii)the registration date and registration number;
(iii)the reason for the notification;
(iv)the date on which the crypto-asset exchange service provider came to fall under any of the items of Article 63-20, paragraph (1) of the Act;
(v)if the crypto-asset exchange service provider has discontinued all or part of the crypto-asset exchange services, the reason therefor; and
(vi)if the crypto-asset exchange service provider has discontinued all or part of the crypto-asset exchange services by way of transfer of business, merger or company split, or for other reasons, the method for the business succession and the successor.
(3)The public notice under the provisions of Article 63-20, paragraph (3) of the Act is to be published in the Official Gazette, in a daily newspaper that publishes particulars on current events, or by means of electronic public notice prescribed in Article 2, item (xxxiv) of the Companies Act.
(4)The public notice and the posting at business offices under the provisions of Article 63-20, paragraph (3) of the Act are to inform of the methods of completing the performance of obligations under the provisions of paragraph (5) of the same Article and returning or transferring the users' property to the users of the crypto-asset exchange services, except for the case where a public notice is given due to business succession by way of transfer of business, merger or company split, or for other reasons.
(5)When having given a public notice under the provisions of Article 63-20, paragraph (3) of the Act, a crypto-asset exchange service provider must immediately submit to the Commissioner of the Financial Services Agency a written notice prepared using appended Form 15 by attaching a copy of the public notice.
(6)When intending to discontinue all or part of the crypto-asset exchange services by way of transfer of business, merger or company split, or for other reasons, a crypto-asset exchange service provider must attach a document containing the terms and conditions of the contract pertaining to the business succession and the method for the business succession to the written notice referred to in the preceding paragraph.
(Notification of Violation of Laws and Regulations)
Article 41If a crypto-asset exchange service provider has come to know that its director, etc. or employee has committed violation of laws and regulations with regard to the crypto-asset exchange services or an act that hinders the proper and steady provision of crypto-asset exchange services, the crypto-asset exchange service provider is to submit to the Director-General of a Local Finance Bureau, etc. a written notice prepared using appended Form 16 containing the following particulars, within two weeks from the day on which it came to know that fact:
(i)the name of the business office at which the relevant act occurred;
(ii)the name and the title of the director, etc. or employee who committed that act; and
(iii)summary of the act.
(Government Agency through Which to Submit Written Notice)
Article 42(1)If a crypto-asset exchange service provider (including a person intending to obtain a registration referred to in Article 63-2 of the Act; the same applies in the following Article) submits to the Commissioner of the Financial Services Agency the written application for registration prescribed in Article 4 and other documents prescribed in the Act and this Cabinet Office Order (hereinafter referred to as "written application, etc." in the following paragraph and the following Article), the crypto-asset exchange service provider must submit it through the Director-General of a Local Finance Bureau having jurisdiction over the location of the head office of the crypto-asset exchange service provider (when the office is located within the jurisdictional district (excluding the jurisdictional district of a Local Finance Office) of the Fukuoka Local Finance Branch Bureau, the Director-General of the Fukuoka Local Finance Branch Bureau; and when the office is located within the jurisdictional district of a Local Finance Office or the Otaru Sub-office or Kitami Sub-office of the Hokkaido Local Finance Bureau, the head of the Local Finance Office or sub-office (referred to as the "Head of the Local Finance Office, etc." in the following paragraph and the following Article)).
(2)If a crypto-asset exchange service provider intends to submit a written application, etc. to the Director-General of a Local Finance Bureau, etc., and there is a Head of the Local Finance Office, etc. with jurisdiction over the location of the head office of the crypto-asset exchange service provider, the crypto-asset exchange service provider must submit the written application, etc. to the Director-General of a Local Finance Bureau, etc. through the Head of the Local Finance Office, etc.
(Submission of Written Application through Certified Association for Payment Service Providers)
Article 43When intending to submit a written application, etc. to the Commissioner of the Financial Services Agency or the Director-General of a Local Finance Bureau, etc. (including submission through the Head of the Local Finance Office, etc. under the provisions of the preceding Article), a crypto-asset exchange service provider may submit it through a certified association for payment service providers.
(Standard Processing Period)
Article 44(1)The Commissioner of the Financial Services Agency is to endeavor to process any application for registration made pursuant to the provisions of Article 63-2 of the Act within two months from the day on which the application has arrived at the office.
(2)The period prescribed in the preceding paragraph does not include the following period:
(i)the period required to amend the application;
(ii)the period required for the applicant to change the details of the application; or
(iii)the period required for the applicant to add materials that are found to be necessary for the examination pertaining to the application.