Cryptocurrencies to be Regulated as Financial Products, Cabinet Approves Amendments to the Financial Instruments and Exchange Act

On April 10, the Cabinet approved amendments to the Financial Instruments and Exchange Act. This marks a historic step in formally recognizing cryptocurrencies as 'financial products' under the law, applying regulations against unfair practices such as insider trading and market manipulation to the cryptocurrency market for the first time.

If enacted in the current Diet session, the law is expected to be implemented during fiscal 2027.

One of the key pillars is the obligation for issuers to disclose information annually. By introducing transparency standards from the stock market to the cryptocurrency market, it is expected to create a more accessible environment for domestic and international institutional investors.

The penalties include a maximum of 10 years in prison and a fine of 10 million yen...