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CoinDesk 2025-03-31 06:04:56

Japan Mulls Reclassifying Crypto as a ‘Financial Product’ to Curb Insider Trading: Report

Japan's Financial Services Agency (FSA) plans to reclassify cryptocurrencies as financial products under new rules, aimed at curbing insider trading in the digital asset market, per a Nikkei report on Sunday. The move comes as part of a broader effort to strengthen oversight in Japan's crypto ecosystem, which has witnessed growing adoption alongside a rise in fraudulent activities. The FSA intends to submit amendments to the Financial Instruments and Exchange Act (FIEA) to Japan's parliament as early as 2026, following a detailed review conducted by experts behind closed doors. Cryptocurrencies are currently categorized as a "means of settlement" under the Payment Services Act, a designation that has governed their use primarily as a payment tool rather than as investment vehicles. However, this existing classification has left gaps in regulatory oversight, particularly concerning activities like insider trading. As such, specific details about the insider trading rules — such as what constitutes insider information in the crypto context or the penalties for violations — have not yet been disclosed, leaving room for further clarification as the proposal takes shape.

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