Japan Tightens Cryptocurrency Trading Rules, Targets Insiders
Japan is bringing cryptocurrency trading under its securities law, giving regulators new powers to pursue insider trading.
Japan‘s parliament approved new amendments on Wednesday that will recognize cryptocurrencies as financial assets, a move that would put their regulation under the Financial Instruments and Exchange Act, according to Japanese broadcaster NHK.
Crypto had previously been regulated mainly under Japan’s Payment Services Act, which treated it more as a payment method than an investment product.
With the latest change, cryptocurrency trading will become subject to rules closer to those governing stocks and other securities, including restrictions on trading based on insider information.
That could give regulators clearer grounds to pursue project founders, exchange employees and other people who trade before market-moving information becomes public.
The law also raises the maximum punishment for operating an unregistered crypto trading business from three years in prison and a fine of about $20,000 to 10 years and roughly $67,000.
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More Crypto Businesses Face Oversight
The new regulations don’t limit themselves to the fight against insider trading. The regulations will require crypto exchanges to comply with the general structure of Japan’s financial services industry, according to Anderson Mori & Tomotsune Law Firm in Japan, says Japanese law firm Anderson Mori & Tomotsune.
Additionally, some crypto issuers will have to make certain disclosure requirements similar to those made by firms issuing securities.
Crypto lenders will be subjected to regulation, and firms that offer wallets and other technologies to exchanges may face new notification and compliance requirements, per the report.
Japan had about 13.2 million crypto accounts by July 2025, with users holding roughly $33 billion on domestic crypto exchanges, Reuters previously reported.
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