Crypto Today: Japan shifts rules, Twenty One drops, Lummis update
Key developments in the digital asset sector over the past two days include Japan proposing a shift in crypto supervision to securities law, shares of Twenty One Capital sliding 20% on their New York Stock Exchange debut, and U.S. Senator Cynthia Lummis indicating a markup of a market structure bill before the holiday recess.
Japan proposes moving crypto oversight from payments to securities law
Japan’s Financial Services Agency (FSA) on Wednesday released a comprehensive report from the Financial System Council’s Working Group assessing cryptocurrency regulation across multiple sectors.
The report outlines a plan to transfer the legal foundation for crypto regulation from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), the country’s primary statute for securities markets, issuance, trading, and disclosures. The FSA indicated the change reflects the growing use of crypto assets as investment products and the need for safeguards aligned with financial instruments.
Bringing crypto under FIEA would tighten disclosure standards for initial exchange offerings (IEOs), or token sales conducted via exchanges, by requiring more timely and robust data for prospective investors.
The document also notes that user crypto transactions resemble securities dealings and may include sales of new tokens as well as trading of existing assets, underscoring the importance of timely information during IEOs.
Source: FSA Japan
Twenty One Capital shares fall 20% on first day of trading
Shares of Twenty One Capital (XXI), a newly listed U.S. crypto treasury company, declined 20% on their trading debut following a merger with the blank-check firm Cantor Equity Partners.
The stock opened on Tuesday at $10.74, below the $14.27 closing price on Monday for the special purpose acquisition company it combined with. On Wednesday, Twenty One Capital closed at $11.42, down 19.97% over 24 hours.
Jack Mallers appearing on CNBC’s “Money Movers” on Tuesday. Source: CNBC
Twenty One Capital has been among the more closely watched crypto listings this year, with backing from stablecoin issuer Tether, crypto exchange Bitfinex, and Japan’s SoftBank Group. Jack Mallers, the founder and CEO of Bitcoin platform Strike, has been named CEO of Twenty One.
The company holds over 43,500 Bitcoin valued at over $4 billion, representing the third-largest holdings among public companies behind Bitcoin miner MARA Holdings, according to BitcoinTreasuries.NET.
Sen. Lummis expects crypto market structure markup next week
Wyoming Senator Cynthia Lummis, a member of the U.S. Senate Banking Committee, said she aims to advance the committee’s digital asset market structure bill with a markup as soon as next week.
Speaking Tuesday at the Blockchain Association Policy Summit, Lummis said she anticipates a markup hearing for the Responsible Financial Innovation Act, the committee’s market structure proposal, before Congress departs for the holidays. She noted industry concerns about the bill’s pace and said bipartisan negotiations had required frequent revisions, adding that proceeding to markup and pausing over the Christmas break would allow time to regroup.
Senator Cynthia Lummis (center) speaking at the Blockchain Association Policy Summit on Tuesday. Source: Blockchain Association
A markup hearing allows lawmakers to consider amendments and changes prior to sending a bill to the Senate floor for a vote.
The Banking Committee released a discussion draft in July, following passage of the Digital Asset Market Clarity Act in the U.S. House of Representatives. Subsequent progress was slowed by the longest government shutdown in U.S. history and reports of opposition from some lawmakers regarding decentralized finance provisions.
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