Japan Reclassifies Crypto as Financial Instruments to Unlock Domestic Venture Capital
JW
Jamie Wilde
crypto IRS ruling · Apr 11, 2026
Source: The Digital Ledger Data Terminal
Domestic venture capital funds can now deploy capital into crypto without restructuring through foreign entities. This shift follows an April 10 Cabinet approval of a bill reclassifying crypto as a financial instrument under the amended Financial Instruments and Exchange Act. The move pulls digital assets out of the Payment Services Act framework and places them on the same legal footing as stocks and bonds.
For the 105 cryptocurrencies flagged by the FSA, including Bitcoin and Ethereum, the compliance surface area has expanded. Issuers now face mandatory annual disclosure requirements covering technology, token supply, and risk factors, matching the disclosure regime Japanese equity issuers operate under.
The structural change arrives via the LPS Act amendment, which removes the legal prohibition on Japanese venture capital funds structured as investment limited partnerships from holding crypto assets directly.
crypto IRS rulingcrypto regulation bill
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