Summary of this article
Japan classifies crypto assets as financial instruments, bringing them under stricter regulations.
New rules introduce insider trading norms and disclosure requirements for crypto issuers.
Penalties increase for unregistered services while exchanges must maintain customer protection reserves.
As cryptocurrencies gain wider acceptance globally, countries are adopting different approaches to regulate digital assets. While some countries are introducing clearer rules to bring crypto within financial regulations, others are taking a cautious approach. Japan has now introduced changes to bring cryptocurrencies under its financial regulations.
According to Japan’s public broadcaster NHK, the revised law will classify crypto assets as financial instruments, bringing them under insider trading regulations. It was approved at a plenary session of the House of Councillors on July 15, 2026 and changes how crypto assets are treated under Japanese law.
Until now, cryptocurrencies in Japan were legally positioned mainly as a means of payment. However, with the growing adoption of digital assets, the revised framework will treat crypto assets as financial instruments, bringing them under stricter regulations.
According to the report, the number of cryptocurrency users in Japan has been rising steadily with total accounts on crypto exchanges crossing 14 million. Under the new rules, crypto assets will be subject to insider trading regulations, similar to other financial products.
The amendment will also introduce some extra disclosure requirements for issuers who create new crypto assets to raise funds. These issuers will be required to provide information about how the funds raised through such assets will be used.
Japan has also increased penalties for businesses that offer crypto asset services without registration. The maximum prison sentence has been raised from three years to 10 years, while the maximum fine has increased from 3 million yen to 10 million yen.
In addition, cryptocurrency exchanges will be required to maintain reserves to compensate customers in case of losses caused by unauthorised access or data breaches. The revised framework is expected to come into effect within a year.
Beyond the regulatory changes, Japan is also considering changes to the taxation of crypto assets. According to a previous Bloomberg report, proposed revisions could lower the maximum tax rate on gains from cryptocurrencies such as Bitcoin and Ether from 55 per cent to a flat 20 per cent, similar to that on stocks and bonds. The proposed tax changes are expected to come into effect in 2028.
