Maksym Sakharov, CEO of blockchain firm WeFi, has publicly criticized Japan's cryptocurrency regulatory framework, citing excessive delays in token approvals by the Japan Virtual Currency Exchange Association (JVCEA) and Financial Services Agency (FSA) as the primary driver stifling innovation.
Sakharov emphasized that Japan's "slow, prescriptive, and risk-averse" processes prioritize risk avoidance over innovation acceleration, contrasting sharply with agile approaches in Singapore and South Korea. This regulatory opacity has forced developers and Web3 startups to relocate operations overseas, resulting in significant capital and liquidity outflows from Japan.
The CEO highlighted concrete industry impacts: projects increasingly launch token listings abroad, domestic investors miss early-stage opportunities, and operational costs surge due to prolonged approval timelines. Historical parallels show similar capital flight occurred when Japan imposed rigid oversight after major 2017 exchange hacks, diminishing its post-2017 leadership position.
Sakharov specifically dismissed taxation as the core issue, noting that proposed tax reforms won't resolve bureaucratic bottlenecks. He advocated for a dynamic regulatory sandbox to retain innovation, warning: "The FSA/JVCEA pre-approval model... keeps builders and liquidity offshore".