Today in crypto: Japan plans to move crypto regulation from payments law to securities rules, Jack Maller’s Twenty One Capital debuted on the New York Stock Exchange but fell 20% on the day, and US Senator Cynthia Lummis expects the digital asset market structure bill to move to markup before Congress breaks for the holidays.
Japan plans major shift as crypto moves from payments to securities law
Japan’s financial regulators are preparing to move crypto asset oversight out of the country’s payments regime and into a framework designed for investment and securities markets.
The Financial Services Agency (FSA) on Wednesday released a comprehensive report from the Financial System Council’s Working Group on the regulatory status of cryptocurrencies across multiple sectors.
The document outlines a plan to shift the legal basis for crypto regulation from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), which is the primary law regulating securities markets, issuance, trading and disclosures.
“Crypto assets are increasingly being used as investment targets both domestically and internationally,” the report noted, underscoring the need to protect users by providing regulation that treats crypto as a financial product.
One of the core changes brought by bringing crypto under FIEA regulatory scope is strengthening data disclosure requirements for initial exchange offerings (IEOs), or token sales managed by crypto exchanges.
“Crypto transactions conducted by users are similar to securities transactions, and may involve the sale of new crypto assets or the buying and selling already in circulation,” the document reads, highlighting the importance of timely information during IEO sales.
Bitcoin firm Twenty One Capital drops 20% on first day of trading
Shares in Twenty One Capital (XXI), the newest crypto treasury company in the US, slid 20% on its trading debut after merging with the blank-check company Cantor Equity Partners.
Twenty One Capital opened trading on Tuesday at $10.74, below the closing price of $14.27 on Monday for Cantor’s special purpose acquisition company that it merged with.
The new Bitcoin-focused company’s stock closed trading on Wednesday at $11.42, down 19.97% over 24 hours.
Twenty One was among the most anticipated crypto public debuts this year, with the company backed by major stablecoin issuer Tether, crypto exchange Bitfinex Japan’s SoftBank Group. Jack Mallers, the founder and CEO of the Bitcoin platform Strike, was also named Twenty One’s CEO.
The company holds over 43,500 Bitcoin worth over $4 billion, boasting the third-largest holdings among public companies behind Bitcoin miner MARA Holdings, according to BitcoinTreasuries.NET.
Senator Lummis anticipates crypto market structure markup next week
Wyoming Senator Cynthia Lummis, a member of the US Senate Banking Committee and one of the most prominent proponents for addressing digital asset market structure in Congress, said she wants to take the next step in advancing the bill sometime next week.
Speaking at the Blockchain Association Policy Summit on Tuesday, Lummis said she anticipated that the markup hearing for the Responsible Financial Innovation Act — the Banking Committee’s version of market structure — would happen before Congress broke for the holidays.
The senator said the crypto industry “was getting a little concerned” about the progress of the bill, adding that drafts were “changed so much every few days” during bipartisan discussions.
“Our staffs are exhausted,” said Lummis, referring to her and Senator Kirsten Gillibrand’s teams. “I think that we’re to the point where it’s better to go ahead with a product and mark it up next week and then give everybody a break over the Christmas break to catch their breath.”
A markup hearing involves lawmakers considering amendments and changes before a bill is sent to the Senate for a vote.
Although the banking committee released a discussion draft of the market structure bill in July, after the Digital Asset Market Clarity Act passed the US House of Representatives, progress was slowed by the longest government shutdown in the country’s history and reports of pushback from some lawmakers over DeFi provisions in the bill.