Japan's Senate Passes Amendment to Financial Instruments and Exchange Act, Redefining Crypto Assets as Financial Products
On July 15, the Japanese Senate passed an amendment to the Financial Instruments and Exchange Act and the Fund Settlement Act, redefining crypto assets as financial products rather than mere payment methods.
Crypto asset exchanges are renamed as trading operators, with significantly increased penalties for violations, and the introduction of insider trading prohibitions and regular disclosure requirements for issuers.
Tighter regulations under market mechanisms attract compliant institutional capital, putting pressure on small exchanges while providing new opportunities for banks, insurance, and asset management companies.
Source: Public Information
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The Japanese government has been continuously improving the regulatory framework for cryptocurrencies in recent years. This amendment continues the path of integrating digital assets into the financial system, consistent with previous legislation related to stablecoins and NFTs.
On the capital front, the tax system shifts from comprehensive taxation to separate declaration taxation, allowing loss carryforwards to reduce the tax burden on investors and activate the market. The disclosure obligations for issuers strengthen information transparency to attract long-term capital.
Similar to the regulatory evolution in Singapore and South Korea, Japan is at the forefront of crypto financial productization in Asia, paving the way for products like ETFs.
This is essentially a capital concentration driven by regulatory changes, providing a framework for institutional entry and ETF establishment, with funds shifting from gray trading to compliant products and exchange ecosystems.
ABAB News · Cognitive Law
- Tax optimization is the switch for market vitality.
- The stricter the insider regulations, the stronger the institutional confidence.
- Regulatory upgrades push small exchanges aside for large capital.