Japan passes crypto overhaul to bring digital assets under financial rules

Japan’s revised Financial Instruments and Exchange Act introduces crypto insider trading rules, tougher penalties, and new oversight requirements for crypto businesses.

Source: Reuters Legal

The revised rules increase penalties for companies operating without registration, reportedly raising the maximum prison sentence from three years to 10 years and increasing fines from around 3 million Japanese yen ($19,000) to around 10 million yen.

Stablecoin and Insider Trading Provisions

Related: Japan stablecoin payments advance with Lawson trial, Netstars launch. Insider trading violations could result in penalties of up to five years in prison, fines of up to 5 million yen, or both, the report notes.

Terminology and Regulatory Alignment

In line with Japan’s move to bring crypto closer to TradFi, the revised law also reportedly changes the terminology for registered businesses from “cryptocurrency exchange” to “cryptocurrency trading company.” The change reflects the broader financial role regulators now assign to the sector.

Global Context

Japan’s crypto regulation developments reflect a broader global trend of regulators applying existing financial frameworks to crypto rather than treating the sector as entirely separate. South Africa’s tax authority published draft guidance in early July outlining how existing tax rules apply to crypto assets, while US regulators continue clarifying how existing securities and commodities laws apply to digital assets.

Magazine: Thai scammer’s $122M wallet, Japan embraces crypto credit: Asia Express