Japan plans to include crypto assets under securities regulatory framework, tighten IEO disclosures, and crack down on insider trading

Foresight News: The Japan Financial Services Agency (FSA) has released a report from its Financial System Council working group, planning to shift the regulatory framework for crypto assets from the current Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), which primarily targets investment and securities markets. The proposal aims to strengthen IEO disclosure requirements, mandating the provision of issuer details and token allocation methods as pre-sale information, as well as conducting third-party code audits.

In addition, the new framework intends to introduce regulations against insider trading and unfair trading related to crypto assets, establish a penalty system, and grant regulators stronger tools to crack down on unregistered platforms, including overseas platforms and DEXs. It also recommends allowing banks and insurance companies to hold crypto assets for investment purposes, provided that a risk management system is established.