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Crypto assets come under Financial Instruments and Exchange Act rules, with insider trading regulations and stronger exchange operator requirements

Publisher finance.biggo.com 4 min de lecture

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Crypto asset trading rules underwent a major transformation in July 2026. With the passage of the revised Financial Instruments and Exchange Act (FIEA), bitcoin and other crypto assets are shifting from regulation as "payment services" to regulation as "financial instruments transactions." The aim is to raise the investor protection framework to a level comparable with the stock market.

The three pillars of this revision are: establishing an information disclosure framework, introducing insider trading regulations, and strengthening requirements for exchange operators. Japan's Financial Services Agency (FSA) has made clear that this does not constitute an "endorsement" of crypto asset investment, and the price volatility risk of bitcoin remains unchanged. This is fundamentally an institutional overhaul designed to enhance the fairness and transparency of the trading environment.

Issuer information disclosure and insider trading rules

In stock investing, investors can review a company's financial performance and business operations. Crypto assets, however, have issuance mechanisms that vary by token, and some—like bitcoin—have no identifiable issuing entity. Under the new framework, for crypto assets with issuers, information disclosure will be required from the issuer in certain circumstances. For those without issuers, the exchange operators handling them will be required to create and provide the necessary information. This advances the development of an environment where investors can make decisions after understanding "what kind of crypto asset this is."

Particularly noteworthy is the introduction of insider trading regulations. For tokens handled by Japanese crypto asset exchange operators, trading based on certain material non-public information will be prohibited. Fraudulent practices and the spreading of rumors will also be subject to regulation. This marks the first systematic introduction of "rules protecting fair trading" into the crypto asset market, bringing it closer to the standards of the stock market.

Stronger requirements for exchange operators

The institutional framework is being developed to impose requirements on exchange operators equivalent to those for Type I Financial Instruments Business. FSA discussion materials indicate a direction that calls for further strengthening of organizational capabilities in areas including capital requirements, capital adequacy ratio regulations, screening of crypto assets offered for trading, customer suitability, and trade surveillance.

Previously, there was a strong aspect of "anyone who opens an account can trade in the same way." Going forward, however, responses tailored to each customer's knowledge, experience, and asset situation may become important.

Cybersecurity measures will also be strengthened. Asset outflows resulting from hacks targeting exchange operators have occurred globally, and the FSA has been advancing efforts to strengthen cybersecurity in 2026. The new regulatory direction includes not only customer asset management but also enhanced security measures across the entire supply chain, including systems managing crypto assets and external contractors.

From payments to investment: the background to the legal revision

In Japan, crypto asset exchange operators have primarily been regulated under the Payment Services Act. In the early days of the 2010s, bitcoin attracted attention as a new technology usable for payments and remittances, and user protection mechanisms were developed primarily around the Payment Services Act. Exchange operators were required to register with the FSA, and rules were established regarding customer asset management and secure management of private keys. The Payment Services Act amendment passed in 2025 included provisions for domestic asset holding orders on exchange operators and the creation of a new intermediary business category, taking effect in June 2026.

Key to understanding this legal revision is the shift in how bitcoin is used. Today, most people buying bitcoin view it not as a payment method for purchasing goods, but as an investment target expected to appreciate in value. Outside Japan, the emergence of spot bitcoin ETFs has accelerated the trend of treating crypto assets as an investment class alongside stocks and bonds. The FSA has explained that this revision reflects the reality that both domestic and international investors now position crypto assets as investment targets.

What investors should understand

Being subject to the FIEA is not the same as bitcoin becoming a safe investment product. Bitcoin's price fluctuates significantly, and unlike stocks, it does not generate profits from which investors can receive dividends. This legal revision does not prevent price declines; its purpose is to establish rules for investor trading and enhance market fairness and transparency. It would be inappropriate to interpret this as "the government has recognized bitcoin as a safe financial product."

On the other hand, this revision is not merely a regulatory tightening—it is also a turning point that squarely positions crypto assets within financial regulation as investment targets. Investment management and investment advisory services related to crypto assets will also become subject to the FIEA, which could lead to institutional groundwork for the future expansion of investment products incorporating crypto assets. Impacts are also expected on bitcoin ETFs, crypto asset funds, exchange operator consolidation, and taxation.

Financial writer Masayuki Tashiro notes: "This legal revision does not change bitcoin itself; it changes the rules for investing in it. The most significant change for individual investors is the strengthening of information disclosure, unfair trading regulations, and exchange operator organizational requirements to create an environment for trading crypto assets as financial products."

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