Quick Breakdown
- Japan’s SESC to gain powers to investigate and penalize crypto insider trading.
- FSA aims to submit a new regulatory framework proposal by next year.
- Pro-tech leadership under Sanae Takaichi could boost innovation while enforcing stronger oversight.
Japan moves to regulate crypto insider trading
Japan’s securities regulator is preparing to introduce comprehensive rules to outlaw and punish insider trading in the cryptocurrency market — a move designed to align digital asset oversight with traditional stock trading regulations.
According to Nikkei Asia, the Securities and Exchange Surveillance Commission (SESC) will soon gain authority to probe suspicious crypto transactions and impose fines proportional to profits made from insider trading. In severe cases, the watchdog will have the power to refer offenders for criminal prosecution.
Japan to ban cryptocurrency insider trading with new rules https://t.co/TaOS9550Pm
— Nikkei Asia (@NikkeiAsia) October 14, 2025
Currently, the Financial Instruments and Exchange Act (FIEA) does not explicitly cover cryptocurrencies, and Japan’s self-regulatory body, the Japan Virtual and Crypto Assets Exchange Association, lacks a robust monitoring framework. This regulatory gap has prompted authorities to push for stronger oversight of the growing digital asset sector.
FSA to propose legal amendments by 2026
The Financial Services Agency (FSA), which oversees the SESC, plans to finalize the details of the new framework through a working group before the end of 2025. A formal proposal to amend the FIEA is expected to be submitted next year.
Japan’s likely next prime minister, Sanae Takaichi, is expected to add political momentum to this regulatory shift. Known for her pro-innovation stance, Takaichi has championed “technological sovereignty” and the expansion of digital infrastructure, including blockchain development.
Her economic policies favouring low interest rates, tax cuts, and looser monetary controls could attract more investment into Japan’s crypto ecosystem while maintaining firm oversight standards. Japan’s Finance Minister Katsunobu Kato also signaled a supportive stance toward cryptocurrencies, recognizing their role in modern investment strategies despite their volatility.
FSA eyes crypto integration into securities framework
Earlier in September, the FSA proposed bringing crypto under the Financial Instruments and Exchange Act instead of the Payment Services Act, aiming to enhance investor safeguards and hold exchanges to higher transparency standards.
The agency believes this integration would help address persistent industry issues such as misleading disclosures, unregistered platforms, scams, and weak security measures.
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