Japan’s Regulatory Shift: Cryptocurrencies Classified as Financial Products
- Japan’s cabinet has approved a draft amendment to classify cryptocurrencies as financial products under the Financial Instruments and Exchange Act.
- If passed, the law could take effect as early as fiscal 2027, shifting from their current classification under the Payment Services Act.
- New regulations will ban insider trading and require annual disclosures from issuers.
- Penalties for operating without registration could increase to up to ten years in prison and fines of up to ¥10 million ($62,800).
- The Securities and Exchange Surveillance Commission will gain enhanced authority to oversee the market.
This regulatory change aims to enhance market fairness, transparency, and investor protection in response to evolving financial landscapes. Minister for Financial Services Satsuki Katayama emphasized that this move would expand growth capital supply.
With potential penalties rising significantly, including prison terms of up to ten years, the new framework marks a substantial shift in Japan’s approach to cryptocurrency regulation. (Source)
