"The proposal marks a shift from Japan's current approach, which treats crypto primarily as a payment method under the Payment Services Act. By bringing digital assets under the same legal structure as stocks and other securities, policymakers aim to align the sector with established financial market standards."
"Under the proposed rules, insider trading involving crypto assets would be explicitly prohibited. Market participants would face penalties for trading on non-public information, a measure long applied in traditional finance but absent in most crypto markets."
"The bill also introduces disclosure requirements for issuers. Companies offering crypto-related products would need to publish annual reports, increasing transparency for investors and regulators."
"Satsuki Katayama, Japan's minister for financial services, said the reform aims to expand access to growth capital while strengthening investor protection. She noted that changes in financial markets and the rise of digital assets require a more robust regulatory framework."
Japan's cabinet approved a draft amendment to classify cryptocurrencies as financial products under the Financial Instruments and Exchange Act. This change aims to align digital assets with established financial market standards. The proposed rules would prohibit insider trading in crypto assets and introduce disclosure requirements for issuers. Penalties for noncompliance would increase significantly, with prison terms of up to 10 years for operating without registration. The reform seeks to enhance investor protection and expand access to growth capital in response to the evolving financial landscape.
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