Japan Brings Crypto Under Financial-Instrument Rules, Bans Insider Trading

Japan previously treated crypto as a means of payment under the Payment Services Act. But as investment trading and institutional demand expanded, the framework proved inadequate to address market abuse such as insider trading. The Financial Services Agency has therefore shifted its regulatory focus to the Financial Instruments and Exchange Act, requiring designated issuers to disclose operating and financial information annually. The stock-like rules are intended to improve transparency and investor protection.

Japan’s Cabinet proposed the amendments on April 10, 2026. The House of Representatives passed them on June 11, and the House of Councillors gave final approval on July 15. The law is expected to take effect in fiscal 2027. It prohibits trading on nonpublic information and raises the maximum prison term for unlicensed operators from 3 years to 10 years, while increasing the maximum fine from 3 million yen to 10 million yen. The tax rate on income from designated crypto transactions is expected to fall from as much as 55% to 20% in 2028.