Japan’s financial watchdog is preparing to introduce new laws that would make insider trading in cryptocurrencies explicitly illegal, according to a report by Nikkei Asia. The move marks a major step toward bringing digital assets under the same level of scrutiny as traditional financial markets.
Staff Writer
The Financial Services Agency (FSA) is reportedly drafting amendments that would prohibit trading based on non-public information, with violators facing penalties tied to the scale of their illegal profits. The proposed changes would also empower the Securities and Exchange Surveillance Commission (SESC) to investigate suspicious cases and recommend either monetary surcharges or criminal referrals.
The FSA aims to finalize the details by the end of this year and submit the proposal during next year’s regular parliamentary session. If passed, it would mark the first time Japan formally bans insider trading in crypto markets — a gap long criticized by industry observers.
Japan to ban cryptocurrency insider trading with new rules https://t.co/TaOS9550Pm
— Nikkei Asia (@NikkeiAsia) October 14, 2025
Currently, Japan’s Financial Instruments and Exchange Act does not cover cryptocurrencies when it comes to insider trading, leaving oversight largely to self-regulation by exchanges and trade associations. But regulators face a key challenge: determining what qualifies as “insider information” in a decentralized environment where many tokens lack clear issuers or corporate structures.
The initiative comes as Japan tightens its oversight of the crypto sector, which is increasingly intertwined with mainstream finance. Just last week, Binance Japan announced a strategic partnership with PayPay Corporation, with the fintech giant acquiring a 40% stake in the local crypto exchange. The deal underscored growing institutional interest in Japan’s digital asset market — and the need for clearer regulatory boundaries.
