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Japan reclassifies bitcoin and crypto as financial assets
The change shifts crypto from the Payment Services Act into the Financial Instruments and Exchange Act, with new insider trading rules, exchange disclosures, and higher penalties.
Japan’s parliament has passed legislation reclassifying bitcoin and other cryptocurrencies as financial assets, a regulatory overhaul that brings the asset class under the same legal framework that governs stocks, bonds, and investment trusts, according to Bitcoin Magazine citing NHK.
The amendment, approved by lawmakers on Wednesday, removes crypto from its prior status under the Payment Services Act and instead places it under Japan’s Financial Instruments and Exchange Act (FIEA). Japan’s government said the update takes effect within a year, with a target of fiscal 2027.
With the change, insider trading restrictions apply to issuers, exchange operators, and other parties with access to non-public information, covering events such as token listings, delistings, and major technical incidents. Exchanges also face new disclosure obligations, including publishing information on token issuers, blockchain design, and volatility profiles.
Penalties also increase under the new regime. The maximum prison term for operating unregistered crypto businesses rises from three years to 10, while the top fine increases from 3 million yen to 10 million yen; the law also includes a plan to cut the top tax rate on crypto gains from 55% to a flat 20% starting in 2028.
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