Japan adopts an amendment to the Financial Instruments and Exchange Act, bringing crypto assets into the scope of financial product regulation

On April 10, the Cabinet Meeting of Japan approved an amendment to the Financial Instruments and Exchange Act, for the first time formally including crypto assets within the scope of financial product regulation;

This also means that the legal status of crypto assets in Japan is being upgraded from the previous “means of payment” to a financial product similar to stocks and bonds.

Under the amendment, issuers of crypto assets will be required to make information disclosures once every year, aiming to improve the market regulatory environment.

At the same time, the bill clearly prohibits conduct such as insider trading using undisclosed information, filling gaps in the regulatory framework that existed before.

In addition, to more precisely reflect the core nature of practitioners’ businesses, the name of registered practitioners will change from “crypto asset exchange operators” to “crypto asset trading operators.”

The amendment will also significantly increase penalties for violations. For those who operate crypto trading without a license, the imprisonment period will be extended from originally within 3 years to within 10 years, and the fine cap will be raised from within 3 million yen to within 10 million yen.

Japan’s Financial Services Agency previously treated crypto assets as a means of payment for regulation under the Fund Settlement Act, but as investment use has increased, the existing framework can no longer effectively address market risks;

Given this, the Financial Services Agency has decided to shift its regulatory approach and include crypto assets in the regulatory system of the Financial Instruments and Exchange Act.

At present, the relevant amendments have been put on the agenda. If they can pass smoothly through the current Diet, they are expected to take effect officially in the 2027 fiscal year.

#金融商品交易法 # Japan