Japan Prepares to Classify Crypto Assets as Financial Products

Japan is poised to reclassify crypto assets from 'payment instruments' to 'financial products' under a pending law. The Financial Instruments and Exchange Act would take effect within one year of its enactment, bringing tougher regulations to the $22.8 billion market.

The number of domestic accounts has approached 14 million, with custodial assets exceeding ¥3.7 trillion (approximately $22.8 billion). This shift in regulatory oversight aims to enhance investor protection and market integrity.

The new law would introduce insider trading regulations and significantly increase penalties for unregistered operators, including up to 10 years in prison and fines of up to ¥10 million (approximately $61,590).