- Japan’s FSA is restructuring the country’s cryptocurrency sector.
- Part of the restructuring process includes banning insider trading.
- The FSA plans to improve transparency and security in the crypto industry.
Japan’s Financial Services Agency (FSA) has initiated plans to restructure the country’s cryptocurrency sector. According to reports, the regulator aims to classify digital assets under the Financial Instruments and Exchange Act (FIEA), therefore aligning them with traditional securities.
Restoring trust and transparency in Japan’s crypto sector
This move by the FSA is part of a broader regulatory adjustment in Tokyo, which is designed to restore trust, enhance transparency, and position Japan as a global hub for institutional cryptocurrency investment.
Financial analysts consider the latest development a significant adjustment in Japan’s effort to regulate the cryptocurrency industry. Most observers view it as the largest cryptocurrency report that Japan has experienced over the past decade, with the number of crypto users in Japan estimated to have reached eight million. According to the FSA, its mission is to ensure stability and legitimacy in a rapidly expanding yet volatile market.
Related: Japan Reveals 2026 Tax Reform, Including Crypto Measures
In line with the ongoing reform, the FSA has introduced a ban on insider trading in cryptocurrencies. According to reports, the FSA and Japan’s Securities and Exchange Surveillance Commission (SESC) will enforce the new rules.
The FSA is plugging an existing loophole
The new legal procedure will allow the SESC to investigate suspected insider traders and impose appropriate fines on violators. The amount to be fined would depend on the profits gained by offenders carrying out insider trading. It is worth noting that “insider trading” laws in Japan did not apply to cryptocurrencies until now, giving certain market participants unfair advantages.
Meanwhile, the new reform will take effect in 2026, enforcing transparency in Japan’s crypto ecosystem and making it more secure. It would enable Japan to close a legal loophole that once gave room for manipulation. The FSA’s plan includes establishing a Crypto Bureau, which will oversee compliance and coordinate with the OECD’s Crypto-Asset Reporting Framework (CARF), ensuring international data exchange and cross-border transparency.
Related: Japan Approves Its First-Ever Yen-Pegged Stablecoin, Backed by Government Bonds
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