BitFlyer CEO Warns Japan’s Proposed Founder Tax Hike Will Trigger Startup Talent Exodus

BitFlyer CEO Yuzo Kano says Japan’s proposed tax hike on founder stock sale gains, which could reach 80%, would push
startup talent out of the country. My take: crypto investors should not treat this as some narrow Tokyo tax story. It
points to where BTC, ETH, and exchange related risk can show up next, because founders build, list, hire, and raise
money where the rules still leave them a reason to keep playing.

Kano, who runs Japanese crypto exchange bitFlyer, told reporters in Tokyo that founder pay in Japan is already “at a
very low level” compared with other markets. Blunt point. Founders often take little or no salary early and wait for
equity to do the work later. Kano said he earned only 4.8 million yen a year, about $33,000, even after bitFlyer had
started to grow. Without the stock upside, he said, bitFlyer might not have survived its early years.

The proposed tax could reach 80% on capital gains from stock sales by company founders and executives, according to
the source material. That is not a tweak. It changes behavior before anyone files a return. Kano called the policy a
talent export machine. I’ll be honest: when Singapore, the United Arab Emirates, and parts of Europe are already
courting founders and investors with friendlier tax rules, that phrase sounds more precise than dramatic.

For crypto markets, the first reading is regulatory pressure. Japan already has strict licensing rules for crypto
exchanges and high corporate taxes, according to the source. Add a founder gains tax of up to 80%, and a Japan based
blockchain company starts to look expensive before product-market fit even enters the room. Why does this matter?
Because exchange liquidity, local token listings, fintech partnerships, and the BTC and ETH infrastructure pipeline
all depend on where serious teams choose to incorporate and hire. One founder leaving is enough. Not every founder has
to go.

One thing gets missed here. Crypto investors talk about regulation as if it only means the SEC, CFTC, ETFs, staking
rules, or exchange lawsuits. That is only half right. This is regulation too, just aimed at the cap table instead of
the trading screen. If founders think the government may take up to 80% of future stock gains, the case for building a
Japan based exchange, wallet, custody company, or blockchain payments firm gets weaker. BTC and ETH may barely move on
the headline. The adoption damage can still be real.

The second reading is adoption, but in reverse. Countries compete for crypto talent because exchanges, stablecoin
rails, custody firms, and fintech infrastructure cluster where founders believe enough upside remains after tax. In my
view, Singapore, the UAE, and several European countries already own that perception battle. Japan has tried to support
startups through its Startup Visa and funding programs, but Kano’s criticism points to a tax-code contradiction.
Adoption is not just a bank offering crypto services or a public company buying BTC. It is where builders put the next
exchange, protocol, or fintech stack.

This matters for BTC and ETH because talent migration changes where market structure develops. If blockchain startups
relocate, custody follows. Compliance staff follows. Venture money and exchange integrations often follow too. For
BTC, that can affect fiat on ramps and regional liquidity. For ETH, it can affect developer formation, wallet tools,
and fintech experiments. Does this guarantee a short term price move? No. It helps decide where the next wave of
crypto companies gets incorporated and regulated.

Kano’s own example gives the debate some needed human texture. A founder making 4.8 million yen, about $33,000, after
the company has shown growth is not exactly the cartoon version of a rich executive ducking taxes. Early founder pay
often sits in paper equity, not salary. Yes, this cuts against the usual “tax exits more aggressively” argument, but
bear with me: if the eventual exit is taxed too hard, the risk reward math starts to break. Founders can move. Capital
moves faster. Crypto teams are usually even more mobile.

Japan’s government does have a real problem to solve. The source says officials are trying to balance tax revenue
against startup growth and entrepreneurship. Fair enough. But crypto markets will judge the outcome by incentives, not
speeches. If Japan keeps strict crypto licensing, high corporate taxes, and adds a founder capital gains tax of up to
80%, investors are likely to see that package as a drag on domestic digital asset formation.

What this means

This exposes a split in Japan’s startup policy. On one side, the government promotes startups through the Startup Visa
and funding programs. On the other, founders may face tax treatment that makes the upside feel barely worth the risk.
For crypto, I would watch exchanges and infrastructure first, not a clean BTC or ETH spot price trigger. BTC is still
the cleaner read on broad risk appetite. ETH is the better read on developer and application momentum if blockchain
founders start choosing Singapore, the UAE, or parts of Europe over Japan.

Watch what Japan’s government and ruling party do next with the proposed tax. Traders should also keep an eye on BTC
around major macro events, including the next FOMC decision and CME positioning data, because regulation and macro
flows often collide on the same tape. Is it overkill to track a founder tax debate alongside macro positioning? For
crypto, no. The source does not give a price level, so there is no reason to invent one. The useful signal is whether
Japan softens the proposal or pushes founders, including crypto founders, to start planning around relocation.