Japan’s Lower House has passed legislation that would treat cryptocurrencies as financial instruments under the Financial Instruments and Exchange Act. The move shifts oversight from the Payment Services Act and sets the stage for lower taxes and crypto ETFs. The rules are expected to take effect in 2027.
The bill introduces stock-style insider trading bans, stricter disclosure requirements, and higher penalties for unregistered crypto businesses. Prison sentences for operating without registration would rise from three years to 10 years, with fines increasing to 10 million yen.
The Financial Services Agency cited rapid growth in crypto adoption, noting more than 14 million open accounts. Low- to middle-income users earning under 7 million yen annually account for roughly 70 percent of those accounts.
The ruling Liberal Democratic Party highlighted that crypto ETFs would offer investors clear and accessible options. The FSA said the framework aims to improve user protection while supporting innovation for both domestic and foreign investors.
Unaudited token offerings would face a 2 million yen investment cap for retail participants. The securities watchdog would gain powers to investigate crimes and freeze funds.
