Financial Instruments and Exchange Act

When a financial instruments business operator, etc. conducts cryptoasset-related business (meaning performing an , on a regular basis, the acts set forth in Article 2, paragraph (8), items (xviii) through (xxv) and any other act that constitutes a financial instruments transaction as specified by Cabinet Office Order with regard to crypto-and other assets (referred to as a "cryptoasset-related act" in the following paragraph) on a regular basis; the same applies in that the following paragraph), it must, pursuant to the provisions of Cabinet Office Order, explain the nature of the crypto-and other assets; provided, however, that this does not apply in the cases specified by Cabinet Office Order as cases where there is no hindrance to the protection of investors.

A financial instruments business operator must not perform the acts set forth in Article 2, paragraph (8), items (xviii) through (xxiv) with respect to cryptoassets that do not conform to the standards specified by Cabinet Office Order as standards necessary to ensure the public interest or the protection of investors.

When the Prime Minister finds it necessary and appropriate for the public interest or the protection of investors in a case where the specified cryptoasset issuer of a specified cryptoasset handled by a financial instruments business operator has violated this Act or an order under this Act, the Prime Minister may order the financial instruments business operator to suspend the services for purchase and sale, etc. of cryptoassets in connection with the specified cryptoasset, or to cease handling the specified cryptoasset. In this case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

If a notice under Article 15, paragraph (1) of the Administrative Procedure Act has been given in a hearing for a disposition under the provisions of the preceding paragraph, the specified cryptoasset issuer prescribed in the preceding paragraph is deemed to be a person who has received the notice under paragraph (1) of that Article for the purpose of the application of the provisions of Chapter III, Section 2 of that Act.

A financial instruments business operator must, pursuant to the provisions of Cabinet Office Order, disclose to the public the daily trading volume and the highest price, lowest price, closing price, and other particulars, for each issue, in respect of the purchase and sale of cryptoassets through the services for purchase and sale, etc. of cryptoassets that it conducts.

A financial instruments business operator must perform cryptoasset, etc. management for customers with the due care of a prudent manager.

When performing cryptoasset, etc. management, a financial instruments business operator must use the method specified by Cabinet Office Order as a method for properly managing customers' cryptoassets.

A financial instruments business operator must not, in connection with the cryptoasset, etc. management that it conducts, receive the provision of cryptoasset management-related services from a person other than a cryptoasset management-related service provider.

When a financial instruments business operator receives the provision of cryptoasset management-related services from a cryptoasset management-related service provider, it must take, pursuant to the provisions of Cabinet Office Order, measures necessary for ensuring the proper and reliable performance of the services relating to the management of customers' cryptoassets, such as establishing standards and procedures for the selection of cryptoasset management-related service providers and providing guidance to that cryptoasset management-related service provider.

When a financial instruments business operator continuously uses an information system necessary for the services for purchase and sale, etc. of cryptoassets that is provided by another person, it must take, pursuant to the provisions of Cabinet Office Order, measures necessary for ensuring the proper and reliable performance of the services for purchase and sale, etc. of cryptoassets, such as establishing standards and procedures for the selection of the person that provides that information system and providing guidance to that person.

In addition to the case of receiving the provision of cryptoasset management-related services from a cryptoasset management-related service provider, when a financial instruments business operator has entrusted a part of the cryptoasset trading business that it conducts to another person (including entrustment over two or more stages), it must take, pursuant to the provisions of Cabinet Office Order, measures necessary for ensuring the proper and reliable performance of the entrusted business, such as providing guidance to the entrustee of the business relating to that entrustment.

A financial instruments business operator must, with regard to the cryptoasset trading business that it conducts, manage customers' money separately from its own money and, pursuant to the provisions of Cabinet Office Order, entrust it in trust to a trust company, etc.

A financial instruments business operator must, with regard to the cryptoasset trading business that it conducts, manage customers' cryptoassets separately from its own cryptoassets, pursuant to the provisions of Cabinet Office Order. In this case, that financial instruments business operator must manage customers' cryptoassets (excluding those that satisfy the requirements specified by Cabinet Office Order as necessary for ensuring the convenience of customers and facilitating the smooth performance of cryptoasset trading business) by a method specified by Cabinet Office Order as one with little risk of impairing customer protection.

A financial instruments business operator must periodically undergo an audit by a certified public accountant or audit by an audit corporation, pursuant to the provisions of Cabinet Office Order, as regards the management conditions under the preceding two paragraphs.

A financial instruments business operator must hold, as its own cryptoassets, cryptoassets of the same type and quantity as the cryptoassets that satisfy the requirements specified by Cabinet Office Order prescribed in paragraph (2) of the preceding Article (hereinafter referred to as "performance-guarantee cryptoassets" in this paragraph and Article 43-17, paragraph (1)), and manage them separately from its own cryptoassets other than performance-guarantee cryptoassets, pursuant to the provisions of Cabinet Office Order. In this case, that financial instruments business operator must manage performance-guarantee cryptoassets by a method specified by Cabinet Office Order as one with little risk of impairing customer protection.

The provisions of paragraph (3) of the preceding Article apply mutatis mutandis to the management conditions under the provisions of the preceding paragraph.

When a financial instruments business operator furnishes as collateral customers' cryptoassets that it manages in connection with the cryptoasset trading business that it conducts (including where it furnishes as collateral a claim for the transfer of cryptoassets that a customer holds against that financial instruments business operator under a contract providing for the management of cryptoassets by that financial instruments business operator) or lends them to another person, it must obtain written consent from the customer, pursuant to the provisions of Cabinet Office Order.

The provisions of Article 34-2, paragraph (12) apply mutatis mutandis to the written consent under the preceding paragraph.