The Financial Services Agency of Japan recently issued a statement that "uncustodial wallet services" using authentication technology do not belong to the crypto asset trading business. This judgment is expected to reduce legal uncertainty in the crypto asset industry.

Uncustodial wallets are digital wallets in which users can manage their own private keys, bypassing central administrators. This approach is the basis for services such as Metamask and Phantom.

This judgment is based on the "gray area elimination system" of the Industrial Competitiveness Enhancement Act, which aims to promote innovation by clarifying the regulatory applicable relationship in emerging businesses. The relevant procedures are requested by the Ministry of Economy, Trade and Industry to the Financial Services Agency for confirmation.