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The ongoing controversy surrounding SANAE TOKEN in Japan has taken another turn, as recent media coverage suggests the office of Prime Minister Sanae Takaichi may have had greater knowledge of the project than previously acknowledged. While the political fallout continues, the core development for the crypto market centers on potential new regulations under discussion in Tokyo.
Political fallout over SANAE TOKEN intensifies
SANAE TOKEN, a memecoin issued on the Solana blockchain, launched on February 25. The project was initiated by NoBorder DAO, which is helmed by Yuji Mizoguchi—a Japanese entrepreneur known for his work with blockchain and tech startups. The coin’s branding prominently featured Prime Minister Sanae Takaichi’s image and career milestones, positioning itself as part of a patriotic campaign called “Japan is Back.” Mizoguchi’s organization describes NoBorder DAO as a decentralized community aiming to expand blockchain adoption through innovative initiatives.
Initially, the token saw a surge in activity, with its price multiplying more than fortyfold shortly after launch. This upward momentum was halted when Takaichi’s office distanced itself from the project, leading to a sharp market correction and a 58% loss in the token’s value. After this, authorities began reviewing the circumstances around the token’s release and its promotional methods.
Japan’s Financial Services Agency (FSA) quickly launched an investigation, citing unauthorized exchange activities linked to NoBorder DAO. Issuance of SANAE TOKEN was suspended as a result, and the incident drew heightened scrutiny to the legal framework governing digital assets in the country.
Complicating the situation, Japanese tabloid Weekly Bunshun published claims that developer Ken Matsui had informed the prime minister’s office that SANAE TOKEN was a cryptocurrency project. Audio recordings reportedly show a secretary of Takaichi expressing approval for the project, potentially undermining earlier denials made by the prime minister in early March.
Regulatory response and new crypto bill
In the midst of the controversy, Japan’s FSA put forward a sweeping legislative proposal to clarify the regulatory treatment of cryptocurrencies. This bill, submitted to parliament in the first week of April, seeks to reclassify crypto assets as financial instruments. Digital assets would be governed by the Financial Instruments and Exchange Act rather than the existing Payment Services Act, marking a significant change in oversight requirements.
The proposed legislation includes much tougher penalties for unlicensed crypto sales. Maximum prison sentences for violations would be increased to ten years, while fines could rise to as much as ¥10 million. The Securities and Exchange Surveillance Commission (SESC) would also obtain expanded authority to pursue criminal investigations involving crypto operators, a measure not previously available.
Another notable provision in the bill would automatically void transactions conducted with unregistered platforms. This change is designed to help affected investors more easily claim refunds in situations similar to the SANAE TOKEN saga. Legislators referenced the high-profile nature of the memecoin case when discussing the rationale behind rapid reform, highlighting the need for clearer consumer protections.
While the bill moves forward in parliament, the prime minister’s office has declined to address specific questions regarding its prior knowledge of the SANAE TOKEN project. Takaichi has not held a press conference since her second cabinet took office in February, and her staff reportedly has yet to respond to major media inquiries about the issue.
The evolving situation underscores the intersection of political reputation, digital asset innovation, and regulatory policy in Japan, as lawmakers seek to restore confidence in the country’s rapidly growing cryptocurrency sector.