Tokyo, 15 October 2025 – Japan’s Financial Services Agency (FSA) is preparing to ban insider trading in cryptocurrency markets. Strengthened measures will bring its digital assets to a level comparable to traditional financial markets.
According to a Nikkei report, Japan’s Securities and Exchange Surveillance Commission (SESC) will be authorised to investigate potential cases of crypto insider trading.
Violators could face penalties proportionate to the profits earned from insider trading. For trades made using undisclosed information, criminal referrals can be issued by SESC for prosecution.
Current challenges in Japan’s crypto market include gaps in information disclosure, weak user protection, and the presence of unofficial service providers.
Regulators raised concerns over misconduct in investment management and advisory activities, as well as issues on fairness of price formation and trading practices.
The FSA’s Discussion Paper in April 2025 on the Examination of the Regulatory Systems Related to Cryptoassets listed the following concerns:
- White papers accompanying new cryptoasset issuances often contain unclear descriptions or discrepancies between the described codes and actual codes.
- Under the current self-regulation imposed on exchange service providers, cryptoasset issuers are not obligated to disclosure or to provide accurate information.
- Service providers soliciting cryptoasset investments without exchange service providers registration including overseas-based service providers emerge and the FSA receives numerous possibly fraud-related inquiries.
- Investment seminars and online communities providing information on cryptoasset transactions are increasingly common. Some are suspected of engaging in illegal activities like defrauding users of money.
The FSA is working to submit a proposal in 2026 with revisions on crypto in the Financial Instruments and Exchange Act.
Japan is proactively laying the groundwork for a more resilient crypto market as it keeps in line with global standards. These measures will improve market transparency, build investor confidence, and attract institutional capital.
The FSA emphasises that a well-established crypto market relies on stronger user protection and public trust. Without these foundations, Japan risks losing the momentum that drives innovation in its digital asset market.
Tougher regulations may result in compliance pressure at the start, but it is ultimately a sign of Japan’s maturing crypto market and its steady progress for long-term stability.
Source: Nikkei
