[Detailed Report] Cabinet Approves Amended Financial Instruments and Exchange Act—The Boundary Between 'Special Provisions' Saving Crypto Asset Businesses and the 'Iron Rules' to Uphold

Amended Financial Instruments and Exchange Act—Three Key Points

1 | Crypto Assets Transition from 'Means of Payment' to 'Financial Instruments'

With the amended Financial Instruments and Exchange Act, crypto assets fall under its jurisdiction, subjecting them to stringent rules akin to securities, including information disclosure, audits, and insider trading regulations. While market reliability is expected to improve, compliance burdens will significantly increase.

2 | Coexistence of 'Special Provisions' for Startups and 'Iron Rules' for Asset Protection

The special entity system alleviates capital and reserve requirements, but mandates segregated management of customer assets, cold wallet management, and performance guarantees. Particularly, whether or not to hold assets becomes a crucial decision point in business planning.

3 | Simultaneous Enhancement of Market Fairness and Emergence of New Business Opportunities

Strict exclusion of unfair practices through insider trading regulations, bans on stealth marketing, and severe penalties for unregistered operations. Meanwhile, the lifting of restrictions on 'intermediary businesses' enables new distribution models. However, depending on the design of outsourcing, the risk of illegality is high, making the construction of a lawful sales network key.

On April 10, 2026, the government approved the 'Bill to Amend the Financial Instruments and Exchange Act and the Act on Settlement of Funds.' This marks a significant turning point for Japan's crypto asset industry.

Looking back to the end of 2025, when the Financial System Council's Working Group (WG) presented its draft report, the industry was filled with both anticipation and anxiety.

The policy to transition crypto assets from the framework of 'means of payment' to the discipline of the 'Financial Instruments and Exchange Act,' equivalent to the securities market, promised the 'light' of enhanced reliability but also foreshadowed the 'shadow' of enormous compliance costs.

Japan's crypto asset system has been predicted to fully transition to a 'financial infrastructure model,' and an analysis of the cabinet-approved bill reveals that this prediction is materializing in a more concrete and strategic form.

The core of this amendment is not merely a blanket strengthening of regulations. It introduces new definitions such as 'specific crypto assets' and 'special operations' to prevent stifling startup potential with 'special provisions (safe harbor),' while establishing 'iron rules' that make no concessions on the protection of customer assets.

Japan's crypto asset market is finally moving into the 'implementation' phase. This article provides a detailed report on the 'new boundaries' that businesses and investors will face based on the latest amendment.

The most significant change in this legal amendment is the transition of the legal status of crypto assets from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA). Previously treated as a 'means of payment,' crypto assets will now be classified as financial products distinct from securities.

This transition is not merely a formal change in the name of the governing law. It signifies that the same heavy responsibilities regarding 'transparency' and 'fairness' as in the securities market will be imposed on transactions.

Definition of 'Specified Crypto Assets' and Issuer Obligations

The amendment defines crypto assets that only specific entities have the authority to issue as 'Specified Crypto Assets.' Tokens issued through mechanisms such as Initial Exchange Offerings (IEOs) fall under this category.

Issuers of 'Specified Crypto Assets' will be required to disclose 'Specified Crypto Asset Information' when soliciting or offering these tokens. This is akin to a securities report for stocks, and continuous disclosure of 'periodic information' and 'extraordinary information' in the event of significant events will also be mandated.

The Hurdle of 'Audit Certification'

Specific figures for investor protection have been incorporated.

In principle, issuers of Specified Crypto Assets must obtain 'audit certification' from certified public accountants or audit firms when soliciting or offering. However, if the amount paid by investors is 'small' (details to be specified by Cabinet Office Ordinance, but currently expected to follow a framework similar to equity crowdfunding), this audit certification requirement may be waived. The specific criteria for 'small' amounts will be determined by government ordinances and Cabinet Office Ordinances, and are currently unspecified.

Conversely, for tokens not subjected to rigorous checks by audit firms, an investment cap per investor (generally 500,000 yen, etc.) is expected to be set. This represents a realistic balance between fundraising freedom and investor protection.

Strict Enforcement Against Information Deficiency

If false information is disclosed, civil liability provisions will be established, and severe penalties will be imposed. With crypto assets now under the FIEA, discrepancies in white paper content are no longer permissible.

Establishing a position as an investment target means bearing heavy legal and financial penalties for the accuracy of the underlying information.