Japan’s House of Councillors passed amendments to the Financial Instruments and Exchange Act and the Payment Services Act on July 15, redefining crypto assets from a means of payment to financial products. The bill raises the maximum penalty for unregistered financial activity to up to 10 years in prison from up to 3 years, and lifts the maximum fine to 10 million yen from 3 million yen. It also introduces insider trading rules for crypto assets for the first time, banning trades based on material non-public information, and requires certain crypto asset issuers to make regular annual disclosures. On taxation, the proposal would shift crypto from comprehensive taxation of up to 55% to separate self-assessed taxation at around 20%, while allowing losses to be carried forward for three years. These tax changes are expected to take effect on Jan. 1, 2028. The proposed amendments also include a regulatory framework to support the creation of crypto asset ETFs.
Japan’s House of Councillors passed amendments to the Financial Instruments and Exchange Act and the Payment Services Act on July 15, reclassifying crypto assets from a means of payment to financial products, according to BlockBeats.
Key changes in the bill
The amendments raise the maximum prison term for unregistered financial activity to up to 10 years, from up to 3 years. The maximum fine would increase to 10 million yen from 3 million yen.
The bill also introduces insider trading rules for crypto assets for the first time, prohibiting trades that use material non-public information. Certain crypto asset issuers would be required to make regular annual disclosures.
Tax treatment and ETF framework
On taxation, crypto assets would move from comprehensive taxation of up to 55% to separate self-assessed taxation at around 20%. The proposal would also allow losses to be carried forward for three years, with implementation expected on Jan. 1, 2028.
The proposed revisions also aim to establish a regulatory framework to support the creation of crypto asset ETFs.
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