Japan's financial regulator is mulling the creation of a regulatory framework for companies raising funds through initial coin offerings, a report indicates.

According to Sankei Shimbun, the Financial Service Agency is considering the revision of relevant laws and regulations in an effort to regulate ICOs in Japan, amid the growing popularity of token sale activities within the territory.

The report indicates that Japan currently has no clear regulations covering ICOs specifically, while the existing bitcoin payment law that went into effect last April is not sufficient to define the legal status of some ICO activities.

"There is an increasing demand for amendment of the law, and the FSA is planning to consider suspension of inappropriate ICOs," the report reads.

The FSA has already started monitoring ICOs that target Japanese investors and are deemed suspicious by the agency.

As reported, the FSA has issued multiple warnings to a Macau-based cryptocurrency firm that solicits interests from residents in Japan and published a formal statement on its website to order a halt to the firm's operation in the country.

The move towards a potential regulation is also a follow-up to the FSA's statement in October last year, in which the agency stressed several risk factors of token sales activities with a fund-raising purpose.

Other nations have recently moved to more clearly define ICO tokens, both to protect investors and to bring clarity to the industry.

Just four days ago, Austria announced plans to draw up ICO and cryptocurrency regulations, using existing rules for the trading of gold and derivatives as a model.

And on Feb. 22, Germany's financial markets regulator issued new guidance on how it will classify ICO tokens, including those it will consider securities.

Japanese yen image via Shutterstock