Crypto regulation in the world: weekly digest #142

Japan

Japan's Financial Services Agency (FSA) has released a discussion paper proposing a new classification system for crypto assets, dividing them into two distinct categories:

Type 1: Funding/Business Crypto Assets

These assets are created for fundraising purposes, with the capital raised directed toward specific projects. Some utility tokens fall under this category. The FSA emphasizes the need for transparency regarding the use of funds and project details to address the information gap between issuers and users.

Type 2: Non-Fundraising/Non-Business Crypto Assets

This category includes assets that do not serve as tools for fundraising or business purposes. Major cryptocurrencies like Bitcoin and Ethereum are classified here. The FSA notes challenges in linking these assets to specific issuers, complicating enforcement of disclosure requirements.

The discussion paper, titled «Examining the Structure of Regulatory Frameworks Related to Crypto Assets», was published on April 10, 2025, and is open for public consultation until May 10, 2025.

This initiative is part of broader efforts to enhance regulatory oversight, combat insider trading, and improve transparency in the crypto market. Additionally, FSA plans to introduce a crypto bill by 2026. This bill aims to classify cryptocurrencies under traditional securities laws and subject them to insider trading regulations, aligning them with the Financial Instruments and Exchange Act.

Pakistan

Pakistan is planning to utilize its surplus electricity for Bitcoin mining and AI data centers, marking a significant shift in its energy and tech policy. This initiative aims to convert excess energy into economic opportunities, leveraging about 10GW of surplus power, with nearly 40% coming from renewable sources like wind, hydro, and solar energy.

Pakistan generates a substantial amount of surplus electricity, which currently goes unused. This surplus costs the government millions in power obligations that are paid for but not consumed. The plan involves using this surplus power for Bitcoin mining and hosting AI data centers. This strategy could help modernize the economy and improve returns on energy investments.

The Pakistan Crypto Council, led by Bilal Bin Saqib, is driving this initiative. The council aims to develop regulations and explore blockchain potential, with Changpeng Zhao, founder of Binance, serving as a strategic advisor.

The initiative could potentially generate significant economic benefits, positioning Pakistan as a leader in blockchain and AI technologies in South Asia. Overall, this move reflects Pakistan's ambition to become a new player in the global crypto and tech landscape by leveraging its energy resources effectively.

Recently, the country has proposed a compliance-based regulatory framework for digital assets. The framework aligns with the Financial Action Task Force guidelines, emphasizing anti-money laundering and counter-terrorism financing measures. This initiative is spearheaded by Pakistan's Federal Investigation Agency (FIA) and aims to address concerns about financial crimes while fostering innovation in blockchain-based finance.

Nigeria

Nigerian President has signed the Investments and Securities Act (ISA) 2025, a landmark law that formally classifies cryptocurrencies and other digital assets as securities. This move grants the Securities and Exchange Commission of Nigeria regulatory oversight over the digital asset space, including exchanges, wallet operators, brokers, and other VASPs. The new legislation aims to foster transparency, attract investment, and address issues like AML and CTF, which had placed Nigeria on the FATF grey list in 2023.

The ISA 2025 replaces the previous Investments and Securities Act of 2007 and expands the definition of securities to include virtual assets alongside traditional instruments. Under this framework, digital assets can now be traded on regulated securities exchanges, with all operators required to register with the SEC and adhere to guidelines on investor protection, AML, and know-your-customer protocols. The law also introduces stricter penalties for fraudulent activities like Ponzi schemes, with offenders facing fines of up to ₦40 million or prison sentences exceeding ten years.

Following a 2021 Central Bank of Nigeria directive banning financial institutions from facilitating crypto transactions, public demand and global adoption forced a policy reversal. By recognizing digital assets as securities, Nigeria is now positioned as Africa's leading crypto market, with hopes of attracting global players and fostering innovation.

The legislation is also seen as a critical step toward Nigeria’s removal from the FATF grey list. Nigerian SEC emphasized that the law signals country’s readiness for business while safeguarding its financial system. The SEC has already set up an implementation team to ensure compliance with the new regulations.

News from other countries:

• Ukraine is advancing its cryptocurrency regulation by proposing a comprehensive taxation framework that could significantly impact crypto earnings. The National Securities and Stock Market Commission has outlined a plan to impose an 18% personal income tax on cryptocurrency profits, supplemented by a 5% military levy, bringing the total tax rate to 23% in some cases.

• The United Nations-affiliated World Food Program USA has expanded its donation capabilities to include over 80 cryptocurrencies. This initiative aims to address urgent global hunger crises exacerbated by funding shortages and follows the Trump administration’s halt of U.S. funding for UN emergency food aid programs in 14 countries, including Afghanistan, Syria, and Yemen.

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