Japan Plans to Include Cryptocurrency in Securities Regulations

BlockBeats News, December 10, Japan's financial regulatory system is undergoing a major transformation. The Japanese Financial Services Agency (FSA) released the latest report from the Financial System Review Board's working group on Wednesday, proposing a plan to shift the regulatory foundation of crypto assets from the current Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), which mainly focuses on investment and securities markets.

The report points out that crypto assets are increasingly becoming investment targets both domestically and internationally, and therefore need to be protected following financial product standards. Key changes include:

• Strengthening IEO Disclosure: If included in the FIEA, exchange-led Initial Exchange Offerings (IEOs) will be required to provide more rigorous presale disclosures, including core team information, independent third-party code audits, and incorporation of self-regulatory organization opinions.
• Project Teams to Disclose Identities: Regardless of decentralization, issuers will be required to disclose their identities and token issuance and distribution models.
• Enhanced Enforcement Powers: The new framework will give regulators stronger tools to combat unregistered platforms, especially overseas or DEX-like operators, and will explicitly prohibit insider trading, aligning with the overall direction of the EU's MiCA and South Korea's regulatory approaches.
• Simultaneous Progress in Tax Reform: At the same time, the Japanese government is considering unifying the tax rate on crypto trading profits to a single rate of 20%.
• Cautious Attitude Towards Derivatives: On the same day, the FSA also expressed a cautious attitude towards derivative approvals for overseas crypto ETFs, stating that the underlying assets are "not ideal."