Today in Crypto: Japanese Crypto Businesses Seek Tax Cuts; Crypto Trading Drops Amid SEC Probe Fears

Japanese crypto lobbying groups will ask the government to ease up on corporate tax rules they say are stunting growth for the industry, Bloomberg reported Wednesday (July 27).

The Japan Cryptoasset Business Association and the Japan Virtual and Cryptoassets Exchange Association have a proposal to make it cheaper for companies to issue and hold crypto tokens.

They’ll submit it to the Financial Services Agency in the country, asking the government to stop taxing paper gains on crypto holdings if firms own them for reasons aside from short-term trades.

As it is now, the profit from crypto holdings, unrealized gains included, incurs a corporate tax of around 30%, which can make it costly for companies to keep digital coins once they’re issued.

The requests from the crypto industry, the report said, will end up testing how committed Prime Minister Fumio Kishida’s government is to developing Web3 in Japan. This comes as high taxes have driven some Japanese companies to move to Singapore.

In other news, the U.S. Securities and Exchange Commission (SEC) is looking into digital currencies listed on Coinbase, causing concerns that there could be a “major crackdown” coming, Bloomberg reported.

It comes as the SEC has been investigating whether Coinbase evaded regulations in offering trading for some currencies.

Digital assets have been having a rough week, and concern that the SEC is looking into crypto trading has only made things worse.

The report said anxiety was only heightened when the SEC identified some crypto assets which it said were securities, as part of an insider trading case. The agency saying that nine tokens fall under its jurisdiction has drawn criticism from the Commodity Futures Trading Commission, which also oversees crypto in the U.S.

An SEC lawsuit filed July 21 against a former Coinbase manager accuses him and two others of insider trading. Federal prosecutors in Manhattan have also charged the three men.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.