Japan Moves to Ban Cryptocurrency Insider Trading Amid Regulatory Gaps

Japan's Financial Services Agency (FSA) is preparing to crack down on insider trading in cryptocurrency markets, a sector currently exempt from such regulations under the Financial Instruments and Exchange Act. The move follows growing concerns over inadequate oversight by the Japan Virtual and Crypto Assets Exchange Association (JVCEA).

Regulators aim to amend the FIEA by 2026 to explicitly prohibit trading based on non-public information like upcoming exchange listings or undisclosed security vulnerabilities. The Securities and Exchange Surveillance Commission (SESC) will lead consultations to establish clear guidelines, mirroring existing stock market protections for events including mergers and natural disasters.

Nikkei reports the reforms could enhance market fairness and bolster institutional confidence in digital assets. The initiative marks a significant step toward legitimizing cryptocurrencies as regulated investment vehicles in Japan's financial ecosystem.