Japan is poised to rewrite cryptocurrency oversight rules and move to curb insider trading in cryptocurrencies as part of a broader push to get digital markets back on track.
The country’s Financial Services Agency plans to give market watchdog Securities and Exchange Surveillance Commission the power to crack down on illegal cryptocurrency trading, in a change that could reshape global standards for market integrity.
The framework is expected to be finalized this year and submitted to Parliament by 2026.
If officially enacted, the rules for securities style will be expanded. Financial Instruments and Exchange Act Access digital assets for the first time. This means that the Securities Surveillance Commission may investigate suspicious virtual currency transactions and recommend fines or criminal referral for transactions based on non-public information.
Policy observers say the shift could accelerate global alignment on market integrity standards and create competitive convergence that compels other jurisdictions to follow suit.
Cesaia López, director of policy and research at Solana’s talent group Superteam UK, said Japan’s actions could “increase pressure for a clearer federal framework” for the United States, which is “known for tackling insider trading in cryptocurrencies on a case-by-case basis” under the Security Act.
“Insider trading is eroding the integrity of the international financial system and contributing to the destruction of the crypto community’s belief in democratizing access to wealth,” Lopez said. decryption. “Any move that helps harmonize protection against the virus globally should be welcomed.”
But on a practical level, the United States treats decentralized financial entities in a “highly inconsistent” manner, leading to regulatory fragmentation with “different enforcement scopes and timelines that affect policy.”
Japan’s move shows that it is “choosing legislative clarity over case-by-case improvisation,” as it “enshrines the ban on crypto insider trading within the FIEA and empowers the Securities and Exchange Surveillance Commission with securities-style tools,” said John Park, head of Korea at the Arbitrum Foundation. decryption.
“That creates a gravitational pull,” Park says. “Compliance teams that are standardizing around MiCA in Europe will find the Japanese FIEA rulebook easy to read.”
Park said that while “market integrity operating norms” will be strengthened “first in Brussels and Tokyo,” U.S. actors may soon “adapt to those norms out of competitive necessity.”
Japan’s legislative priority model is “consistent with EU ideals and sets a high bar for market integrity,” he said. “But regional hubs are not copying each other line by line.”
Park said the effect is “effectively a block of clarity that each agency deems easy to read, even if the local rulebook is not the same.”
Codifying insider trading depends on “how quickly the major markets can come together on an outcome,” said Sam So, chairman of the Kaia DLT Foundation. decryption.
While the US will “build its approach through enforcement and case law” and the EU will likely “build this into the MiCA framework,” Japan’s move will “make it politically easier for other jurisdictions to treat insider trading of tokens as a crime rather than a gray area,” Xu said.
Such clarity could benefit those who are “practical-minded” and create “liability for those trading in sensitive information,” he said. “Honesty is now a fundamental requirement.”
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