Japan's Financial Services Agency Clarifies Legal Status Of Non-Custodial Wallet Services

According to Odaily, Japan's Financial Services Agency (FSA) has issued an opinion stating that non-custodial wallet services using authentication technology do not fall under the category of crypto asset trading business (management business). This decision aims to alleviate some of the legal uncertainties within the crypto asset (virtual currency) industry. The decision was made through the 'gray zone elimination system' based on the Industrial Competitiveness Enhancement Act. This system is designed to promote innovation by clarifying applicable regulations for new businesses in advance. The process involves the business minister (in this case, the Ministry of Economy, Trade, and Industry) requesting the regulatory minister (the FSA) to confirm the regulations. A lawyer familiar with crypto asset legal affairs commented, 'This is the first time the gray zone elimination system has been applied to the crypto asset trading industry and the first official opinion clarifying the legal status of non-custodial wallets.'