Japan’s financial regulators are moving to explicitly ban cryptocurrency insider trading, aiming to close a loophole in existing laws.
The Financial Services Agency (FSA) is preparing amendments to the law that would make trading based on non-public information a prohibited act in the crypto market. The change would allow for financial penalties proportional to illegal profits for violators.
Crucially, the amendments would grant the Securities and Exchange Surveillance Commission the authority to investigate suspected insider trading cases and recommend either surcharges (fines) or criminal prosecution.
Currently, Japan’s financial regulations do not cover cryptocurrencies under insider trading laws, leaving oversight largely to industry self-regulation. However, defining “insider information” and identifying who qualifies as an “insider” is a unique challenge in crypto, as many tokens lack a traditional issuer.
The FSA plans to finalize the regulatory details by the end of the year, with the goal of submitting the changes to the Japanese parliament during next year’s regular session. This move reflects a broader trend of Japanese regulators increasing oversight as the crypto sector converges with traditional finance, highlighted by recent business alliances like PayPay acquiring a 40% stake in Binance Japan.
October 2025, Cryptoniteuae
