Japanese regulators have issued a warning to a foreign ICO agency operating in Japan without the relevant license, in the first action of its kind since cryptocurrencies were recognized as a legal form of payment in April 2017.

After previously issuing advice to the company, which has been found to be soliciting investment from Japanese citizens without the relevant licensing in place, Macau-based Blockchain Laboratory has become the first company to receive an official warning.

If breached, the official warning could result in legal action against the firm, including criminal action for executives at the highest level of the company.

According to statements issued by the Japanese Financial Services Authority on the matter, Blockchain Laboratory will be given time to comply with the warning, or face the legal consequences.

“The warning will be issued to Blockchain Laboratory, based in Macau. The agency has decided the company’s activities could cause investors to incur losses. The FSA will work with the police and the Consumer Affairs Agency to bring criminal charges if the company fails to respond to the warning,” the regulator said.

Blockchain Laboratory runs ICOs for other companies, opening up initial coin offerings and cryptocurrencies as a means of raising capital for businesses on the blockchain.

The FSA has previously instructed the Macau-based firm to halt its business activities in Japan—activities that require a relevant license from the authority.

Since new laws were introduced to recognize the legal status of cryptocurrencies back in early 2017, cryptocurrency exchanges and some other businesses operating in the sector are required to register with the FSA for a license.

According to the regulator, the actions of Blockchain Laboratory are covered by the requirements for licensing, and continuing to trade on the same basis will result in further enforcement action.

Once issued, the warning will become the first formal notice of this type served by the FSA, at a time of increasing pressure on regulators globally to step up their efforts in regulating ICOs and cryptocurrency businesses.

It remains to be seen whether Blockchain Laboratory will heed the warning, and whether further action will be necessary from the FSA in upholding the requirements of Japanese law.

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