The Japanese government has greenlit a legislative amendment aimed at categorizing cryptocurrencies as financial products, signaling a significant regulatory shift. By bringing crypto assets under the purview of the Financial Instruments and Exchange Act, the same framework governing stocks and securities, the proposed law could come into effect as early as 2027 if approved in the current parliamentary session. Previously, Japan regulated crypto primarily as a payment method under the Payment Services Act, focusing on aspects like custody, anti-money laundering, and exchange registration.
The updated rules would not only outlaw insider trading but also compel issuers to release annual disclosures, increasing transparency. Additionally, penalties for operating without proper registration would escalate, with potential prison sentences of up to 10 years and fines reaching 10 million yen. The Securities and Exchange Surveillance Commission would also see its authority expanded to better monitor the market.
According to Minister for Financial Services Satsuki Katayama, this move is designed to 'enhance the availability of growth capital in response to evolving financial and capital markets, ensuring fairness, transparency, and investor protection.'