Japan just told the crypto industry to put on a suit and tie. The country’s parliament has passed legislation reclassifying digital assets as “financial instruments” under the Financial Instruments and Exchange Act, a move that effectively places crypto on the same regulatory footing as traditional securities like stocks and bonds.
The bill, which cleared the lower house of parliament around June 10-11, 2026, followed cabinet approval on April 10. Full enactment is expected in 2027 after upper house review. It represents the most significant overhaul of Japan’s crypto regulatory framework since the country first brought exchanges under the Payment Services Act years ago.
What the new rules actually look like
The new framework introduces insider trading prohibitions for non-public material facts. Mandatory disclosures for token issuers are also part of the package. Crypto projects selling tokens to the Japanese public will need to open the books.
The penalty structure is not subtle. Unregistered operations could face up to 10 years of imprisonment or fines of ¥10 million. For retail investor protection, the legislation introduces investment caps of ¥2 million for unaudited offerings.
