Japan Moves to Ban Crypto Insider Trading with Upcoming Regulations

Japan's Financial Services Agency (FSA) is tightening its grip on cryptocurrency markets, proposing rules that would criminalize trading based on undisclosed information. The regulatory body aims to reclassify certain digital assets under the Financial Instruments and Exchange Act, subjecting them to the same insider-trading prohibitions as traditional securities.

A government working group has set a deadline of late 2025 to finalize the framework, with legislative amendments potentially following in 2026. The Securities and Exchange Surveillance Commission WOULD gain expanded authority to investigate suspicious transactions, impose penalties, and pursue criminal charges—mirroring its oversight of stock and bond markets.

The move signals Japan's continued push to align crypto markets with conventional financial regulations, potentially setting a precedent for other jurisdictions. Market participants should prepare for heightened scrutiny of trading patterns and profit anomalies in coming years.