Crypto Donations That Are Not Reported Are Legal.

Crypto Outpaces Political Donation Laws in Japan

A major Japanese news publication reports that the crypto donation to each politician is legal and does not need to be reported publicly as a contribution. The Japanese Ministry of Internal Affairs and Communications verifies that even though it is illegal to donate cash or securities directly to politicians or political campaigns, crypto donations still fly under the radar because of technical classification. The gap has several commentators in the country who say the current law "does not keep pace with the times."

Crypto Donations That Are Not Reported Are Legal

Japanese media outlet Yomiuri Shimbun reported on Saturday that "Cryptographic assets, donations for individuals are legal," even when direct individual donations to politicians are not currently related to the Japanese yen and marketable securities, stocks and bonds.

Under current conditions, political contributions in fiat currencies and other standard instruments must be donated to political organizations and reported to the public by the receiving entity. However, due to technical classification, cryptographic assets fly under this regulation, according to the Japanese Ministry of Home Affairs and Communications. As it stands, individual politicians can thus receive individual crypto campaign funds without reporting donations publicly.

Infographic detailing the current legal status of political donations under Japanese law. Source: Yomiuri Shimbun.
Although crypto has the status of a legally accepted currency in Japan, the Political Fund Control Act that regulates donations reportedly fails to include crypto assets as illicit money or securities for individual political donations due to crypto differences from the national fiat yen and its derivatives. This law can be renewed immediately to build greater transparency in the political process. The article quoted Japanese University Law, Professor Tomoaki Iwai, as stating:

The current law does not keep pace with the times.

Technology Outperforms Government

A centralized government falling behind technological innovation is not new, and while regulators are likely to jump on this new invention soon to close the door to crypto-enabled funding routes under the table, it serves to demonstrate the power of technology in general. For those who enter the crypto space at least in part because of privacy, autonomy and the efficiency of crypto assets, the situation in Japan presents evidence of a real-life concept: centralized regulation, in essence, will always fail to keep up with decentralized and rapidly developing technology.

A Twitter user commented on the story, noting that the current situation is a kind of anachronism, posting a famous Japanese cartoon depicting an old-time bureaucrat and rich donor talking about how corrupt they were together, with bureaucrats saying cunningly to donors, "You’re bad too" @Nishi8maru stated in his tweet that "this legal status is a typical example of anachronism."

This legal status is a typical example of an anachronism.
Users in the thread voiced confusion and mistrust of the news, noting that the Japan Financial Services Agency (FSA) had set up crypto and that it was a taxable asset for everyone, which had to be reported by individuals. Some claim that politicians only use and make laws to serve themselves. Whatever the case, crypto once again shows itself as an effective tool in avoiding regulation. If politicians can use it to fulfill their own goals, however corrupt or virtuous it is, the story leaves some people wondering how everyday individuals can utilize the same innovative power of financial sovereignty in their own lives, kings, and bureaucrats are condemned.


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