The Japanese government cabinet has approved a bill to classify cryptocurrencies as financial commodities.

ME News report: On April 10 (UTC+8), the Japanese government approved an amendment to the Financial Instruments and Exchange Act at a cabinet meeting. The amendment, for the first time, brings crypto assets (virtual currencies) under regulation as financial instruments, and prohibits insider trading and other conduct involving buying and selling based on undisclosed information. It also requires crypto-currency issuers to provide information disclosures once every year to improve a healthy market environment. If the bill passes in the current session of the National Diet, it is expected to take effect at the earliest in fiscal year 2027.

Previously, the Japan Financial Services Agency mainly regulated cryptocurrencies based on their positioning as “used as a means of payment,” under the Fund Settlement Act. However, in recent years, as the use of cryptocurrencies as investment tools has continued to increase, they will be brought within the regulatory framework of the Financial Instruments and Exchange Act. In addition, the name of registered institutions will change from “crypto asset exchange operators” to “crypto asset trading operators.”

At the same time, penalties will be strengthened: for institutions that carry out sales without registration, the maximum imprisonment term will increase from 3 years to 10 years, and the maximum fine will rise from the current 3 million yen to 10 million yen. By increasing penalties, the stance on protecting investors will be further reinforced. (Source: ChainCatcher)