Japan has taken a significant step towards regulating its cryptocurrency industry by approving an amendment to the Financial Instruments and Exchange Act (FIEA). Under the new framework, crypto assets will be treated as financial products subject to stricter rules, required disclosures, and explicit prohibitions on insider trading.
The FIEA revision aims to expand investor protection and market oversight in Japan's growing cryptocurrency market. The government has been signaling this shift since late 2025, and the cabinet's approval moves the plan from proposal stage to formal legislation.
Unlicensed crypto operators will face increased penalties, with prison sentences jumping from a maximum of three years to 10. Fines will also increase from ¥3 million to ¥10 million. Issuers will be required to file annual disclosures, bringing them closer in line with publicly listed companies.