Japan is preparing to roll out its first-ever insider trading laws for digital assets, a move that would bring the country’s crypto markets under the same strict standards applied to traditional securities.
As reported by Nikkei Asia, the Securities and Exchange Surveillance Commission (SESC) will soon gain new powers to investigate suspicious trades, levy fines, and refer criminal cases for prosecution, a responsibility it has long held over stock markets but not crypto.
At present, Japan’s Financial Instruments and Exchange Act (FIEA) does not address insider trading in cryptocurrencies, leaving enforcement largely to the Japan Virtual and Crypto Assets Exchange Association (JVCEA).
However, the self-regulatory body has faced challenges in identifying or curbing illicit activity. The new framework aims to close this loophole and elevate crypto oversight to the same legal tier as securities regulation.
The Financial Services Agency (FSA) expects to finalize the proposal by the end of 2025, with formal legislation targeted for the following year. Experts caution, however, that defining “insiders” in decentralized systems may prove difficult, as many crypto tokens lack a central issuer or unified governance body.
If enacted, Japan’s initiative could become a blueprint for global regulators, reinforcing investor trust and signaling the nation’s commitment to cleaner, institution-ready crypto markets.