Japan to Classify Crypto as Financial Product

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Japan’s Financial Services Agency (FSA) plans to propose reclassifying crypto assets as financial products, aiming to introduce new regulations on crypto insider trading, as reported by Nikkei on Sunday.

The FSA intends to suggest amendments to the Financial Instruments and Exchange Act to parliament by 2026, following a closed-door analysis by experts of the existing legal framework. Currently, Japan recognizes cryptocurrencies as a means of settlement under the Payment Services Act.

The potential rule change aims to enhance oversight of local crypto service providers amidst increasing cases of scam cryptocurrencies.

Classifying crypto as a financial product would require not only exchanges but also companies soliciting crypto investments to register with financial regulators.