Japan’s FSA To Prepare Regulatory Overhaul Banning Insider Trading In Crypto

Japan’s Financial Services Agency (FSA) and the Securities and Exchange Surveillance Commission (SESC) are advancing a landmark regulatory overhaul aimed at banning insider trading in cryptocurrencies. The new framework, set for enforcement in 2026, will close a critical loophole—current insider trading laws do not apply to digital assets.

The proposed amendments to the Financial Instruments and Exchange Act (FIEA) will classify specified cryptocurrencies as financial instruments, subjecting them to the same prohibitions on undisclosed information trading as stocks and securities. The SESC will gain investigative authority to probe suspicious trades, impose penalties tied to illicit gains, and recommend criminal prosecution for severe violations.

Japan’s crypto market, with millions of active users, has outpaced existing oversight. This move signals regulators’ intent to align digital asset governance with traditional financial markets—a step likely to bolster institutional confidence while curbing market abuse.