Japan’s Crypto Regulations Drive Developers Offshore, Not Taxes

WeFi CEO Maksym Sakharov has expressed concerns over Japan’s crypto regulatory framework rather than taxes as the key factor driving developers and investments abroad. He cited the lengthy approval processes as the primary issue.

The Japan Virtual and Crypto Assets Exchange Association and the Financial Services Agency manage the two-step approval process. Such complexity is forcing firms like WeFi to seek opportunities overseas, affecting the local crypto ecosystem.

Japanese crypto developers are facing delays of 6-12 months for token approvals, prompting teams to list first abroad. This approval bottleneck affects local projects and discourages market entry.

Regulatory constraints deter innovation and liquidity inflow, leading to capital flight. Despite proposed tax reforms, the fundamental challenges remain unaddressed, aggravating Japan’s crypto industry landscape.

Localized projects are inclined to initiate operations abroad due to regulatory latency. This attrition impacts Japan’s ambition to be a global crypto hub, potentially stunting technological progress and economic growth.

The regulatory approach not only affects domestic market readiness but also shifts financial opportunities overseas. Sakharov suggests evaluating other markets like the UAE and Singapore, known for their dynamic regulatory models. Both regions favor a pro-business climate.