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

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

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The Japanese government recently (4/10) 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 regulation. It explicitly bans the use of non-public information for “insider trading,” and requires cryptocurrency issuers to make information disclosures once every year to help create a healthier market environment.

According to a report by Nikkei, if the amendment is successfully passed by the current Diet session, it is expected to take effect as early as the 2027 fiscal year.

In the past, Japan’s Financial Services Agency (FSA) has long treated cryptocurrencies as “payment instruments” and regulated them under the Payment Services Act. However, as cryptocurrency investment has become increasingly prominent, the authorities have decided to include cryptocurrencies within the scope of regulation under the Financial Instruments and Exchange Act, and the names of registered operators will change from the current “crypto asset exchange operators” to “crypto asset trading operators.”

To strengthen investor protection, the revised amendment significantly increases penalties. For those who sell tokens without registration, the maximum prison sentence will be raised from 3 years to 10 years; at the same time, the maximum fine will be increased by more than three times, from 3,000,000 yen to 10,000,000 yen.

Japan’s Finance Minister Yayo Katayama emphasized at a press conference after the cabinet meeting: “In the face of the rapidly changing financial capital markets, we must be