Japan Cracks Down on Crypto with Dedicated FSA Division

Japan has launched a dedicated division within its Financial Services Agency (FSA) to oversee and regulate cryptocurrencies and stablecoins. The new Cryptocurrency and Stablecoin Division will operate under the Asset Utilization and Insurance Supervision Bureau, starting August 7.

The division will have three distinct offices: one for overseeing licensed exchanges and service providers, another for innovation policy development, and a third for strategic planning of digital payment systems.

As part of this reorganization, Japan's lawmakers have updated the Financial Instruments and Exchange Act to classify digital currencies as financial instruments. This reclassification brings cryptocurrency markets under regulatory standards comparable to conventional securities markets.

The revised legislation also introduces harsher penalties for unregistered operations, including increased maximum incarceration periods from three years to ten years and monetary fines from three million yen to ten million yen.