Japan’s House of Councillors on July 15 approved amendments to the Financial Instruments and Exchange Act and the Payment Services Act that would redefine crypto assets from a means of payment to financial products, according to CoinPost. The bill includes several major changes: crypto asset exchange operators will be renamed crypto asset trading operators; penalties for unregistered sales will be raised, with the maximum prison term increasing from up to three years to up to 10 years and fines rising from up to 3 million yen to up to 10 million yen. The legislation also introduces insider trading rules for crypto assets for the first time, banning trades based on undisclosed material information, and requires certain crypto asset issuers to make regular annual disclosures. On taxation, the proposal would shift from comprehensive taxation of as much as 55% to self-assessed separate taxation at roughly 20%, while allowing losses to be carried forward for three years. Those tax changes are expected to take effect on Jan. 1, 2028. The bill also sets a regulatory framework for crypto asset ETFs, with Japan Exchange Group expected to work toward ETF listings around 2027. Attention will now move to cabinet orders and supervisory guidelines, including reserve requirements and leverage limits for derivatives.
Japan’s House of Councillors on July 15 passed amendments to the Financial Instruments and Exchange Act and the Payment Services Act, formally redefining crypto assets from a means of payment to financial products, according to CoinPost.
Key changes cover operator classification, penalties and disclosure
The revisions rename crypto asset exchange operators as crypto asset trading operators. They also raise penalties for unregistered sales, increasing the maximum prison term from up to three years to up to 10 years and lifting the maximum fine from 3 million yen to 10 million yen.
The bill introduces insider trading rules for crypto assets for the first time, banning trades that use undisclosed material information. Certain crypto asset issuers will also be required to provide regular annual disclosures.
Tax changes are expected from 2028
On taxation, the proposal would move from comprehensive taxation of as much as 55% to self-assessed separate taxation at about 20%. It would also allow losses to be carried forward for three years. The changes are expected to take effect on Jan. 1, 2028.
ETF framework is in place, with implementation details still to come
The legislation also provides an institutional framework for crypto asset exchange-traded funds. Japan Exchange Group is expected to push for ETF listings around 2027.
With the bill passed, attention will now shift to more detailed rules through cabinet orders and supervisory guidelines, including reserve levels and leverage limits for derivatives. The report said compliance costs may pressure small and mid-sized exchanges, while opening the door wider for asset managers, banks and insurance institutions.
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