Coming into effect as early as next year! Japan passes an amendment: classifies cryptocurrencies as "financial products" to strengthen regulation

On April 10, the Japanese government passed an amendment to the Financial Instruments and Exchange Act, marking the first time that cryptocurrencies have been classified as “financial products” for regulation, and strictly prohibiting the use of non-public information for insider trading.

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The Japanese government previously held (4/10) a cabinet meeting and formally approved an amendment to the Financial Instruments and Exchange Act. For the first time, it classifies cryptocurrencies as “financial products” for regulatory purposes, explicitly bans “insider trading” using non-public information, and requires cryptocurrency issuers to make information disclosures once every year to create a healthier market environment.

According to a report by Nikkei News, if the amendment is successfully passed by this session of the Diet, it is expected to be officially implemented as early as the 2027 fiscal year.

In the past, Japan’s Financial Services Agency (FSA) has long regarded cryptocurrencies as “means of payment” and regulated them under the Payment Services Act through the “Fund Settlement Act (Payment Services Act).” However, as cryptocurrency investment has become increasingly prominent, the authorities decided to bring them under the regulatory scope of the Financial Instruments and Exchange Act. The names of registered operators will also change from the current “crypto asset exchange operators” to “crypto asset trading operators.”

To strengthen investor protection, the new version of the amendment significantly increases penalties. For those who sell tokens without registration, the maximum prison term will be raised from 3 years to 10 years. At the same time, the maximum fine will be increased by more than three times, rising from 3 million yen to 10 million yen.

In a press conference after the cabinet meeting, Japanese Finance Minister Katayama Yukiko emphasized: “In the face of the rapidly changing financial capital markets, we must ensure the fairness, transparency, and investor protection of the market while expanding the supply of 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