Nikkei: Japan's Financial Services Agency plans to propose formal classification of crypto assets as financial products

Nikkei News reported on Sunday that the Japanese Financial Services Agency plans to propose officially classifying crypto assets as financial products, as part of new regulations on insider trading of cryptocurrencies. It is reported that the Japanese Financial Services Agency plans to submit an amendment to the Financial Instruments and Exchange Act to the Diet as early as 2026, following a closed-door expert analysis of the existing legal framework. Currently, Japan classifies cryptocurrencies as a means of settlement under the Payment Services Act.

The report states that with potential rule changes, Japanese financial regulators are seeking to strengthen control over local cryptocurrency service providers as they see an increasing number of cases involving fraudulent cryptocurrencies. Classifying cryptocurrencies as financial products means that not only exchanges, but also companies soliciting cryptocurrency investments will need to register with financial regulators.

According to the Nikkei News, the upcoming legislation may distinguish crypto assets from other securities such as stocks and bonds, and insider trading rules are expected to take a form similar to regulations on traditional financial products. Details on insider trading rules have not been disclosed.