SAEDNEWS: Japan has passed a new law that classifies cryptocurrencies as official financial instruments and prohibits insider trading. The amendment is designed to increase transparency among issuers and brings crypto regulation closer in line with the standards applied to the stock market.
According to Saed News Agency’s Digital Currency service, citing Nobitex, Japan on Friday officially classified cryptocurrencies as financial instruments for the first time following an amendment to its “Financial Instruments and Exchange Act.” The landmark decision comes amid a significant rise in the involvement of major institutional investors in the crypto market.
Under the new law, all forms of insider trading and transactions based on undisclosed information are completely prohibited. Crypto issuers and token projects are also required to publish annual financial transparency reports.
Previously, Japan’s Financial Services Agency (FSA) regulated cryptocurrencies primarily under payment and settlement laws. However, due to the rapid growth of institutional investment, crypto assets are now regulated on par with traditional stocks and securities.
Japan’s Finance Minister Satsuki Katayama stated after the cabinet meeting: “In response to changes in financial markets, we are expanding the supply of capital for growth while ensuring fairness, transparency, and investor protection.”
Following the amendment, penalties for unregistered exchanges have also been significantly increased. The Japanese government has additionally supported reducing crypto capital gains tax to a flat 20 percent and plans to legalize cryptocurrency exchange-traded funds (ETFs) by 2028.
Major financial groups such as Nomura Holdings and SBI Holdings are among the leading institutions developing crypto-related products. These developments position Japan as one of the global leaders in the regulated adoption of the cryptocurrency market.
