Japanese Financial Services Agency (FSA) has announced changes to the definition of the second article of the Law on Financial Instruments and Exchanges. The main goal is to provide tokens of members of DAO companies with the same status as those of ordinary participants of traditional LLCs. It is expected that this change will make regulation simpler and simplify financial transactions.

In Japan, work is actively underway on the legal framework for DAOs (decentralized autonomous organizations). The authorities seek to clarify the laws and rules of operation, duties and rights of members, as well as tax issues and other aspects. Until March 4, 2024, the local Financial Services Agency accepts feedback from the public on the proposed changes. Once all procedures are completed, the initiatives will be presented and implemented.

"The lack of a clear legal status poses a risk of unexpected application of existing norms. This makes it difficult for the formation and functioning of the DAO. With a clear legal status, external activities become more reliable and faster," the Coinpost journalist said.

The Japanese authorities note that "when creating and managing a DAO as an LLC, it is possible to give them legal personality, clarify the responsibility of members, implement flexible management through the founding agreement and clarify tax aspects."

Further discussions on the development of a legal framework for the DAO will address a wide range of issues, including the compliance of tokens with employee rights, as well as security and anonymity issues.