Japan’s getting ready to crack down on crypto insider trading for the first time ever. The Financial Services Agency is planning to file amendments that would make it illegal to trade based on non-public information, with violators facing financial penalties based on how much money they made illegally.
Right now, Japan’s Financial Instruments and Exchange Act doesn’t actually cover cryptocurrencies when it comes to insider trading. That’s left the whole thing up to crypto companies and industry groups to police themselves, which obviously hasn’t been super effective.
The FSA wants to finalize all the regulatory details by the end of this year and submit everything to parliament during next year’s regular session. If it passes, the Securities and Exchange Surveillance Commission would get power to investigate suspected cases and recommend either fines or criminal charges.
The tricky part is figuring out what counts as insider information for crypto. Unlike stocks, where there’s always a clear company behind them, lots of tokens don’t really have identifiable issuers. That makes it hard to figure out who even qualifies as an “insider” in the first place.
This push comes as Japanese regulators are paying way more attention to crypto because it’s merging with traditional finance. Just last week, Binance Japan announced PayPay Corporation bought a 40% stake in their exchange, showing how mainstream crypto is becoming in Japan.
Conclusion
Japan’s FSA is preparing amendments to ban crypto insider trading with financial penalties, targeting parliamentary submission in 2026 despite challenges defining insiders for decentralized tokens.
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