Japan's Financial Services Agency is about to issue regulations to govern initial coin offerings, the bulk of which are used by start-up businesses to procure funds from private investors by issuing their own virtual currencies.

The regulator is wary of the bad reputation that ICOs have garnered in recent months, with fraud or apparent fraud abounding in many cases. The FSA therefore plans to limit individuals' investment in ICOs so as to protect them from sharp practice.

One safeguard is for the FSA to require outfits that issue their own crypto-currencies to sign a register which it is about to compile.

Press reports suggest that this is going to require secondary legislation, with the FCA asking Parliament to amend the Financial Instruments and Exchange Act 2006 and the Payment Services Act 2009 in the New Year.

Business operators that set up ICOs do so on websites that display their business. The investments they hope to attract come in the form of existing virtual currencies, such as ethereum, instead of dollars, yen, euros or other inflationary 'fiat' currencies. In return, investors receive crypto-tokens.