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Japanese authorities have classified cryptocurrencies as financial instruments., 2026/04/10 12:57:51
The Japanese government has approved amendments to the Financial Instruments and Exchange Act, which classify digital currencies as financial instruments. The new regulations also tighten the requirements for crypto asset issuers.
Previously, the Financial Services Agency of Japan (FSA) regulated cryptocurrencies under the Payment Services Act, viewing them solely as a means of payment. However, the government has now reclassified cryptocurrencies due to the increasing interest from corporate investors.
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The updated legal framework mandates that crypto asset issuers disclose financial statements annually. Additionally, a ban on insider trading—transactions based on non-public information—is introduced, along with increased penalties for violations.
For individuals, the penalties for operating a crypto business without a license have been intensified: the maximum prison sentence has been raised from three to ten years, and fines can reach up to 10 million yen (approximately $67,800).
“The reclassification of crypto assets as financial instruments will enhance transparency and investor protection, as well as broaden capital-raising opportunities,” stated Japan’s Finance Minister Satsuki Katayama.
Earlier, Japanese authorities supported an initiative to reduce the maximum tax rate on profits from cryptocurrencies from 55% to a fixed 20%. Furthermore, the FSA plans to legalize cryptocurrency ETFs by 2028.
