Japan Classifies Crypto as Financial Product Under New Securities Law

The Japanese government has reclassified cryptocurrency as a financial product, moving it out of payment law and into securities law. This shift affects roughly 105 crypto assets, including Bitcoin and Ether, which will now be regulated under the Financial Instruments and Exchange Act (FIEA).

This change brings several new obligations for exchanges, token issuers, and traders. Exchanges must provide standardized disclosures for each covered asset, similar to how listed companies disclose financial information. Insider-trading rules are also being implemented, making trading on non-public information a legal violation.

The law is expected to take full effect during fiscal year 2027, with the tax rate change trailing behind in January 2028. The FSA has cautioned that the exact scope of qualifying assets still needs to be finalized.