Japan Reclassifies Crypto Assets as Securities to Close Insider Trading Loophole
RS
Riley Stratton
crypto regulation bill · Apr 10, 2026
Source: The Digital Ledger Data Terminal
Market participants in Japan will face penalties for trading on non-public information under a new regulatory shift. The Japanese cabinet approved a draft amendment to the Financial Instruments and Exchange Act (FIEA), reclassifying cryptocurrencies from payment methods under the Payment Services Act to financial products.
By bringing digital assets under the same legal structure as stocks and securities, the government is aligning the sector with established financial market standards. This reclassification allows for the explicit prohibition of insider trading, a measure long applied in traditional finance but absent in most crypto markets.
Issuers of crypto-related products will now be required to publish annual reports to increase transparency. Penalties for noncompliance will also rise. Operating without registration could result in prison terms of up to 10 years, compared with the current maximum of three years. Financial penalties will increase to 10 million yen, or about $62,800.
The law takes effect as early as fiscal year 2027.
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