The fastest will be next year! Japan passes an amendment: classifies cryptocurrencies as "financial products" to strengthen regulation

The Japanese government passed an amendment to the Financial Instruments and Exchange Act on April 10, officially classifying cryptocurrencies as “financial products” under regulation, strictly prohibiting insider trading using non-public information.

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Recently (4/10), the Japanese government held a cabinet meeting and formally approved the amendment to the Financial Instruments and Exchange Act, which for the first time classifies cryptocurrencies as “financial products” for regulatory purposes, explicitly banning insider trading based on undisclosed information, and requiring cryptocurrency issuers to disclose information once a year to create a healthier market environment.

According to Nikkei News, if the amendment passes smoothly through this session of Congress, it is expected to come into effect as early as fiscal year 2027.

In the past, Japan’s Financial Services Agency (FSA) has regarded cryptocurrencies as “means of payment,” regulating them under the Payment Services Act. However, as cryptocurrency investment activities have become increasingly prominent, authorities have decided to include them under the scope of the Financial Instruments and Exchange Act, with registered operators changing their name from “crypto asset exchange operators” to “crypto asset trading operators.”

To strengthen investor protection, the revised amendment significantly increases penalties. For unregistered token sales, the maximum prison sentence will be raised from 3 years to 10 years; at the same time, the fine cap will be more than tripled, from 3 million yen to 10 million yen.

Japanese Finance Minister Shunichi Katayama emphasized at the press conference after the cabinet meeting: “In the face of the rapidly changing financial capital markets, we must ensure fairness, transparency, and investor protection while expanding growth capital.”

• This article is reprinted with permission from: “BlockTalk”
• Original title: “Implemented as early as next year! Japan’s Cabinet passes amendment: classifying cryptocurrencies as ‘financial products’ to strengthen regulation”
• Original author: Block Sister MEL