6、Japanese Cryptocurrency Venture Capital

Skyland Ventures 

Skyland Ventures (SV) is a venture capital (VC) fund headquartered in Shibuya, Tokyo, focusing on seed-stage startup investments. As of 2022, it has invested in over 120 startups, primarily based in Japan. Since 2022, the fund has targeted equity/token investments in startups in the Web3 space (cryptocurrencies, NFTs, and blockchain). The fund invests approximately $50,000 to $500,000 in pre-seed stage and up to $1,000,000 in seed and later-stage investments. Its founders are Max Kinoshita, Yonkuro Masanori Ikeda, and Yuan Xiaohang.

They collaborate with Hash Global, OKX Ventures, Foresight Ventures, MH Ventures, and Generative Ventures.Investment History:

• Raised a $4 million seed fund for seed-stage startups in 2012.
• Invested in 16 companies.
• Trasnlimit (provider of the BrainWars brain battle game, with 13 million global app installations, supported by LINE and Braindots, with a total download volume of 23 million)
• Hachimenroppi (provider of a fresh food market supported by Recruit and Yahoo! Japan)
• Kaumo.jp / CuRAZAY.com (targeting popular websites in Japan, with 4-5 million independent user visits)

Gumi Cryptos 

This venture capital firm is a boutique early-stage venture capital firm based in Silicon Valley, investing in information technology, financial services, gaming, insurance, infrastructure, cryptocurrencies, cybersecurity, blockchain, and financial technology in the US, Canada, Europe, Israel, East Asia, South Asia, and Southeast Asia, including Japan. Its co-founders are Zirui Zhang, with managing partners from Japan and China.

Some of its major investment projects include OpenSea, 1inch, and Lit.

CGV Fund

CGV is an Asia-based fund management company specializing in crypto funds and crypto studios investments. CGV FoF consists of family funds from Japan, South Korea, Mainland China, and Taiwan, headquartered in Japan, with branches in Singapore and Canada. Its founders are Steve Chiu and Kevin Ren.

They collaborate with Waterdrip Capital, LK Venture, ZC Capital, Satoshi Lab, and Blockchain Founders Fund.

Some projects in their portfolio include AlchemyPay, Bitkeep, Metis, TheGraph, Avalon, Celestia, and recent Bitcoin ecosystem projects such as the Bitcoin wallet infrastructure UniSat, bitSmiley, and the BTC Layer 2 network ZULU.

BDASH Ventures

BDASH Ventures is a venture capital firm headquartered in Tokyo, Japan, investing in seed, early, and later-stage startups that will become the next generation technology core. The company's CEO is Hiroyuki Watanabe.

B Dash Ventures hosts a semi-annual summit for senior technology industry executives and startup founders twice a year, called B Dash Camp. It is now one of Japan's largest invitation-only tech events, attracting over 700 guests from Japan and abroad.

GMO AI&Web3

This cryptocurrency venture capital fund is part of GMO Internet Group Inc., which is listed on the Tokyo Stock Exchange. The group also includes GMO Coin, a licensed cryptocurrency exchange in Japan, listing 28 cryptocurrencies.

MZ Web3 Fund

The MZ Web3 Fund was established by Yousaku Maezawa, known as the Elon Musk of Japan, focusing on Web3 project investments. It is the most active crypto fund in Japan. The MZ Web3 Fund has invested in 24 startup projects in the Web3 field, including decentralized storage project SINSO, payment tools Slash and Transak, development community WEB3DEV, gaming public chain Oasys, and Web3 user growth platform Aki Network. The MZ Web3 Fund will provide community resources through MZ Club and MZ DAO for the invested projects to help them expand rapidly in the Japanese market.

7、Japanese Cryptocurrency Market Regulation

In the global cryptocurrency market, Japan stands out as a unique market, especially in the financial and investment sectors, with tremendous potential. However, due to frequent early attacks on the cryptocurrency market, the Japanese government maintains a cautious attitude towards the cryptocurrency industry and regulates it carefully. On the other hand, Japan's strong sense of crisis has prompted authorities to attempt to utilize emerging technologies such as blockchain to maintain its position as the world's third-largest economy. Japan's blockchain industry regulation policy presents mature and stable characteristics, creating a favorable environment for blockchain startups.

7.1 Legal Status of Cryptocurrencies

In 2016, the Japanese Cabinet passed an amendment to the Payment Services Act, which came into effect in April 2017, defining cryptocurrencies legally and recognizing their legitimacy. Under the Payment Services Act, digital currencies meet all of the following criteria:

• Property values recorded electronically on electronic devices or other items using electronic methods;
• Transferable via electronic information processing organizations;
• Not currency-denominated assets such as domestic or foreign currency;
• Can be used by unspecified persons for the purchase, rental of goods, or receipt of services;
• Can be bought or sold to unspecified persons.

In other words, Japan recognizes cryptocurrencies as a legitimate means of payment. The Payment Services Act is the world's first law to incorporate digital currencies into the legal regulatory system, with significant implications for the digital currency market.

7.2 Tax Policy on Cryptocurrencies

In January 2022, the ruling party, the Liberal Democratic Party, established the Digital Society Promotion Headquarters, and at the same time, the Japanese government launched the "National Strategy." Since then, its Web3 project team has been directly proposing legislative and regulatory reforms to the ruling party. Many of these reforms have been adopted, but others remain pending.

On the corporate tax side, to promote a "token-friendly financing environment" for businesses, the Japanese Web3 policy team proposed two reforms. First, exempting "tokens continuously held by issuing companies" from "enterprise income tax based on year-end market value"; second, exempting "tokens issued by other companies and held by third parties for purposes other than short-term trading" from taxation. The first reform took effect in June 2023, and the second reform was recently proposed by the FSA to be included in the 2024 legislative agenda and passed by the Ministry of Economy, Trade, and Industry (METI). Implementing these two measures may alleviate the long-term disadvantage of domestic enterprise investors compared to overseas investors who can rely on more favorable tax treatment.

On the individual tax side, income from cryptocurrency asset transactions is taxed as "miscellaneous income," with a "minimum tax rate of 55%" when "income tax and resident tax" are combined. This tax is levied not only when the held cryptocurrency assets are exchanged for fiat currency but also when they are exchanged for other cryptocurrency assets, resulting in a significant outflow of taxpayers and hindering tax reporting. The Web3 policy team proposed four reforms. First, a uniform tax rate of 20% on cryptocurrency asset transactions; second, taxation only when "gains and losses" are converted to fiat currency, exempting taxation on "cryptocurrency exchanges"; third, allowing individuals to carry forward losses for up to three years; fourth, applying the same tax rate to "cryptocurrency derivatives trading." However, these reforms were excluded from the 2023 agenda, and it is currently unclear whether these proposals will be part of the 2024 legislative agenda.