Financial Instruments and Exchange Act

A specified cryptoasset issuer must receive an audit certification by a certified public accountant or audit corporation that has no special interest in it with regard to a balance sheet, profit and loss statement, or other information related to financial accounting specified by Cabinet Office Order among the information on specified cryptoassets disclosed pursuant to the provisions of the main clause of Article 27-39, paragraph (1) or the main clause of Article 27-39, paragraph (2) in connection with a public offering or secondary distribution of specified cryptoassets; provided, however, that this does not apply if the requirements specified by Cabinet Order as those under which the amount to be paid by a person that acquires or purchases specified cryptoassets in response to that public offering or secondary distribution of specified cryptoassets is small are satisfied.

The special interest referred to in the preceding paragraph means an interest from the relationship prescribed in Article 24 of the Certified Public Accountants Act (including as applied mutatis mutandis pursuant to Article 16-2, paragraph (6) of that Act), Article 24-2 of that Act (including as applied mutatis mutandis pursuant to Article 16-2, paragraph (6) of that Act), Article 24-3 of that Act (including as applied mutatis mutandis pursuant to Article 16-2, paragraph (6) of that Act), Article 34-11, paragraph (1), or Article 34-11-2, paragraph (1) or (2) of that Act, which a certified public accountant or audit corporation has to a specified cryptoasset issuer, the relationship as a shareholder or an equity holder that a certified public accountant or audit corporation has to the specified cryptoasset issuer, or the relationship which a certified public accountant or audit corporation has in connection with the specified cryptoasset issuer's business or property accounting, that the Prime Minister finds to be necessary and appropriate in the public interest or for the protection of investors and specifies by Cabinet Office Order.

The audit certification under paragraph (1) must be conducted in accordance with the standards and procedures specified by Cabinet Office Order.

When the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a certified public accountant or audit corporation that conducts an audit certification under paragraph (1) to report or submit materials that should serve as a reference.

A financial instruments business operator must, when it intends to newly conduct services for purchase and sale, etc. of cryptoassets for a cryptoasset of a given issue, disclose in advance, pursuant to Cabinet Office Order, information specified by Cabinet Office Order as basic information that should be made clear to investors regarding that cryptoasset (hereinafter referred to as "cryptoasset information"); provided, however, that this does not apply if that cryptoasset is a specified cryptoasset and falls under the case set forth in Article 27-39, paragraph (3), item (i).

When, regarding a cryptoasset that is a specified cryptoasset for which a financial instruments business operator is conducting services for purchase and sale, etc. of cryptoassets, the specified cryptoasset issuer that must disclose periodic information on specified cryptoassets pursuant to the provisions of Article 27-50, paragraph (1) has obtained the approval under the proviso to that paragraph, on the grounds that, in consideration of the transferability of the specified cryptoassets and other circumstances, this does not damage the public interest or result in insufficient investor protection, or in any other case specified by Cabinet Office Order as equivalent thereto, the financial instruments business operator must promptly disclose, pursuant to Cabinet Office Order, the cryptoasset information pertaining to that cryptoasset.

A financial instruments business operator that has disclosed cryptoasset information pursuant to the provisions of the preceding Article must, when it comes to know that the cryptoasset has come to fall under a case specified by Cabinet Office Order as necessary and appropriate in the public interest or for investor protection, promptly disclose, pursuant to Cabinet Office Order, information on the content thereof (hereinafter referred to as "extraordinary cryptoasset information"); provided, however, that this does not apply if that financial instruments business operator has discontinued the services for purchase and sale, etc. of cryptoassets for that cryptoasset, or in any other case specified by Cabinet Office Order.

A financial instruments business operator that has disclosed cryptoasset information or extraordinary cryptoasset information (hereinafter referred to as "cryptoasset information, etc.") must, if there is a particular to be amended in the relevant cryptoasset information, etc., disclose, pursuant to Cabinet Office Order, information to the effect that it is amended (hereinafter referred to as "amended cryptoasset information, etc."); provided, however, that this does not apply if that financial instruments business operator has discontinued the services for purchase and sale, etc. of cryptoassets for that cryptoasset, or in any other case specified by Cabinet Office Order.

A financial instruments business operator that has disclosed cryptoasset information, etc. must, pursuant to Cabinet Office Order, continuously disclose the relevant cryptoasset information, etc. (including amended cryptoasset information, etc. pertaining to that cryptoasset information, etc.; the same applies in the following Article, Article 27-67, and Article 27-68, paragraph (1)) until the day on which it discontinues the services for purchase and sale, etc. of cryptoassets for the relevant cryptoasset (or, in a case specified by Cabinet Office Order as one in which it is found that this does not damage the public interest or result in insufficient investor protection, for the period specified by Cabinet Office Order).

A financial instruments business operator must, when it has disclosed cryptoasset information, etc., notify the Prime Minister of that cryptoasset information, etc., pursuant to Cabinet Office Order, within the period specified by Cabinet Office Order counting from the day on which it disclosed that cryptoasset information, etc.

If the Prime Minister discovers that cryptoasset information, etc. contains false information regarding a material particular, lacks information about a material particular that is required to be published, or lacks information concerning a material fact that is necessary to prevent it from being misleading (hereinafter referred to as "false information, etc." in this Article), the Prime Minister may order the financial instruments business operator that published the cryptoasset information, etc. to publish amended cryptoasset information, etc. pertaining to the cryptoasset information, etc. 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 the Prime Minister has ordered the publication of amended cryptoasset information, etc. pursuant to the preceding paragraph and finds it necessary, the Prime Minister may order the financial instruments business operator that published the cryptoasset information, etc. to suspend the publication of all or part of the cryptoasset information, etc. until amended cryptoasset information, etc. that eliminates the false information, etc. is published based on the order to publish under that paragraph. 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 the Prime Minister has ordered the suspension of the publication of all or part of cryptoasset information, etc. pursuant to the preceding paragraph, the provisions of Article 27-63 do not apply to the cryptoasset information, etc. subject to that order for suspension until amended cryptoasset information, etc. that eliminates the false information, etc. is published based on the order to publish under paragraph (1).

A financial instruments business operator that has sold cryptoassets without publishing cryptoasset information in violation of the provisions of Article 27-60, paragraph (1) is liable to compensate a person that purchased them for damage arising from the violation.

If cryptoasset information, etc. contains false information regarding a material particular, the financial instruments business operator that published the cryptoasset information, etc. and that was intentional or negligent with regard to the existence of the false information is liable to compensate a person that purchased or disposed of the cryptoassets pertaining to the cryptoasset information, etc. through services for purchase and sale, etc. of cryptoassets conducted by the financial instruments business operator while the cryptoasset information, etc. was being published pursuant to the provisions of Article 27-63, for damage arising from the information being false (hereinafter referred to as "false information" in this Article); provided, however, that this does not apply if the person that purchased or disposed of the cryptoassets knew of the false information at the time of the purchase or disposal.

In the case referred to in the main clause of the preceding paragraph, if the disclosure of the existence of false information in the cryptoasset information, etc. is made, a person that purchased the cryptoassets within the one year before the day on which the disclosure of the existence of the false information was made (hereinafter referred to as the "disclosure date" in this paragraph) and that continues to hold the cryptoassets on the disclosure date may treat as the amount of damage arising from the false information in the cryptoasset information, etc. the amount calculated by deducting the average transaction value of the cryptoassets during the one month after the disclosure date from the average transaction value of the cryptoassets (or, if there is no transaction value, the estimated disposal value; hereinafter the same applies in this paragraph) during the one month before the disclosure date.

The term "disclosure of the existence of false information" in the preceding paragraph means that the financial instruments business operator that published the cryptoasset information, etc., or a person that has authority under laws and regulations with regard to the financial instruments business operator's business or property, has taken measures, pursuant to Cabinet Office Order, to make the material particular to be published concerning the false information in the cryptoasset information, etc. available for many persons to know.

In the case referred to in paragraph (2), the financial instruments business operator that is to be liable for compensation is not liable for compensation for all or part of the damage if it proves that all or part of the amount of damage sustained by the claimant arose from circumstances other than the decline in the value of the cryptoassets that could result from the false information in the cryptoasset information, etc.

In the case referred to in paragraph (2), other than the case referred to in the preceding paragraph, if it is found that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the cryptoassets that could have arisen from the false information in the cryptoasset information, etc., and it is extremely difficult to prove the amount of damage arising from such circumstances due to the nature of the damage, the court may determine an appropriate amount as the amount of damage for which the financial instruments business operator is not liable to compensate, based on the entire import of oral arguments and the results of an examination of evidence.

When the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a financial instruments business operator that has published cryptoasset information, etc., a financial instruments business operator that is found to be required to publish cryptoasset information, etc., or any other concerned party or witness, to submit reports or materials that should serve as a reference, and may have the relevant officials inspect these persons' books, documents, and any other articles.

When the Prime Minister finds it necessary with regard to the order for report or submission of materials or the inspection under the preceding paragraph, the Prime Minister may make inquiries to public offices or public or private organizations and request them to report necessary matters.