Regulation of Crowdfunding and P2P Lending in Japan

Abstract

AbstractIn Chap. 10, the regulation of various types of crowdfunding and P2P lending in Japan is discussed. While there is a range of financial regulations in Japan, these regulations mainly try to protect either individual investors or fundraisers. Naïve investors may mistakenly put their valuable money into fraudulent investment schemes or inappropriate investment schemes. In the same way, naïve fundraisers may assume inappropriately heavy obligations, resulting in financial distress in the future. In the case of conventional finance to corporations, special regulation is not needed to protect them because they are supposedly more knowledgeable and sufficiently intelligent to avoid an excessive financial burden. However, in the case of crowdfunding and P2P lending, those who accept finance are not necessarily wise and prudent corporations, but often individuals with limited resources. This is why financial regulations need to protect not only individual investors, but also fundraisers.