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Japan's 2026 Crypto Amendment: What Changes, and When

Cover Image for Japan's 2026 Crypto Amendment: What Changes, and When
Masayuki Tani

The Short Answer

Japan has regulated crypto assets under the Payment Services Act (資金決済法, Shikin Kessai-hō) since 2017, treating them mainly as a means of payment. An amendment enacted in July 2026 moves them into the Financial Instruments and Exchange Act (金融商品取引法, Kin'yū Shōhin Torihiki-hō, or "FIEA"), the law that governs securities and derivatives. Under the FIEA, crypto assets are regulated as a financial instrument distinct from securities.

The amendment works in four areas:

  • disclosure: issuers that offer certain tokens to the public, and exchanges that list tokens, must publish information about them,
  • business regulation: crypto exchanges become registered financial instruments businesses under the FIEA,
  • unregistered operators: heavier penalties, court injunctions, and a rule that can make their sales void, and
  • unfair trading: new insider trading rules, with administrative surcharges and criminal investigation by the securities regulator.

The crypto provisions take effect on a date to be set by Cabinet Order, by July 2027 at the latest. Existing exchanges get a transition period.

This is the first article in our series on the amendment. Later articles cover each area in more detail.

Where Things Stand

The amendment act (Act No. 64 of 2026) was enacted on 15 July 2026 and promulgated on 23 July 2026. It also covers matters outside crypto, such as sustainability disclosure and startup finance, which have their own effective dates.

Much of the detail is left to a Cabinet Order and Cabinet Office Ordinances.

We discussed the bill before the vote in Japan Is Moving Crypto Under Securities Law. This article describes the act as passed.

Why Crypto Is Moving to the FIEA

The FSA's explanatory materials for the bill say that crypto assets are increasingly held as investments. They point to more than 14 million domestic accounts, to survey results showing that most users buy in the hope that prices will rise over the long term, and to growing interest from institutional investors.

The FSA lists the problems the amendment is meant to address:

  • fraudulent solicitation by unregistered operators,
  • misconduct in investment seminars and online communities,
  • white papers that are unclear or that do not match the token's actual code,
  • continued losses of crypto assets in cyberattacks, and
  • the absence of insider trading rules, in light of IOSCO recommendations and legislation in Europe and elsewhere.

The amendment follows the report of the Financial System Council's Working Group on Crypto-asset Systems, which the FSA has published in English.

What Counts as a Crypto Asset

The definition of "crypto asset" (暗号資産, angō shisan) moves from the Payment Services Act to the FIEA (amended FIEA Article 2(49)). Its wording is carried over largely unchanged.

Stablecoins that qualify as electronic payment instruments (電子決済手段, denshi kessai shudan) remain under the Payment Services Act and are outside the new crypto rules. Tokens that represent certain rights deemed to be securities under the FIEA, of a kind designated by Ordinance, also remain outside the crypto-asset definition.

The act adds a new category, the "specified crypto asset" (特定暗号資産, tokutei angō shisan). It means a crypto asset that only a specific person has the authority to issue, together with similar tokens designated by Ordinance (Article 2(50)). Several of the new rules, such as the issuer's disclosure duty, apply only to this category.

1. Disclosure

The amendment creates statutory disclosure duties for crypto assets, in two layers.

  • An issuer that offers a specified crypto asset to the public must publish information about itself and the token beforehand, and must then publish updates (Articles 27-39, 27-50 and 27-51).
  • An exchange that begins handling a token must first publish basic information about it (Article 27-60). This applies, for example, where the exchange lists a token on its own initiative, with no offering by the issuer. Where the issuer has published its own information for an offering, the exchange instead provides that information to investors.

False statements in published information carry civil liability, criminal penalties and surcharges, along the same lines as for securities. Where an issuer offers a specified crypto asset without audited financial statements, the amount each investor can put in will be capped (Article 27-59). The FSA's materials say the cap is planned to follow the model of equity crowdfunding.

2. Exchanges and Other Businesses

Registration

A crypto-asset exchange (暗号資産交換業者, angō shisan kōkangyōsha) becomes a "crypto-asset trading business" (暗号資産取引業者, angō shisan torihikigyōsha). It must register as a financial instruments business under the FIEA (Articles 28(5) and 29). The regulated activities include buying and selling crypto assets, intermediating such trades, underwriting and offering specified crypto assets, taking customers' money, holding crypto assets for others, and borrowing crypto assets (Article 2(8)(xviii) to (xxv)). Borrowing crypto assets from users was not part of the old exchange business and is now added.

The FSA describes the resulting regime as equivalent to that for Type I financial instruments business (第一種金融商品取引業, daiisshu kin'yū shōhin torihikigyō). Existing Type I firms that want to deal in crypto assets need a change of registration.

Conduct and safeguards

The rules on safeguarding customer assets under the Payment Services Act, including the principle of holding crypto assets in cold wallets, are carried into the FIEA. The amendment adds:

  • a ban on handling tokens that do not meet standards needed to protect users (Article 43-7),
  • requirements for business management systems, which the FSA expects its Ordinance to set out, covering the review of tokens, checks on customer suitability and trade surveillance,
  • a duty to supervise outsourced work (Article 43-13), and a prior-notification regime for providers of key systems used to manage crypto assets, and
  • a reserve to fund compensation to customers if crypto assets are lost through unauthorized access (Article 46-5).

Advice, fund management and brokers

Investment advice and investment management involving crypto assets fall under the existing FIEA rules for investment advisory and investment management businesses. Intermediaries for crypto trades move from the Payment Services Act's intermediary regime to the FIEA's financial instruments intermediary regime.

Foreign exchanges

A foreign crypto business that is not registered in Japan may not deal with persons in Japan, except where the counterparty is a registered Japanese crypto business or in other cases set by Cabinet Order (Article 62-2).

3. Unregistered Operators

The amendment adds several tools against operators that serve customers in Japan without registration.

  • Penalties. Running a crypto business without registration becomes punishable by up to ten years' imprisonment, a fine of up to JPY 10 million, or both. Under the Payment Services Act the maximum is three years and JPY 3 million. The SESC can investigate it as a criminal case.
  • Injunctions. Courts can issue emergency injunctions against unregistered crypto businesses, and the SESC can apply for them.
  • Void sales. If an unregistered operator sells a token that no registered Japanese business handles, with some exceptions set by Cabinet Order, the contract is void unless the seller proves that the customer was adequately protected or that the sale was not an unjust profit (Article 171-15). The act calls such a token an "unpublished crypto asset" (未公表暗号資産), a name unrelated to inside information.

The act also requires anyone who publicly gives an opinion on a crypto asset for payment from an issuer, an exchange or certain others to disclose that they are being paid (Article 171-12). This reaches paid promotion by influencers.

4. Unfair Trading

Since a 2019 amendment, the FIEA has prohibited market manipulation, spreading rumours and fraudulent conduct in crypto-asset trading, but it has had no insider trading rules for crypto assets. The amendment adds them (Articles 171-7 to 171-10).

  • The rules cover tokens handled by a registered Japanese trading business, wherever the trade takes place.
  • The insiders are people connected with the issuer, with a Japanese trading business, or with someone planning a very large purchase or sale.
  • Insider trading is punishable by up to five years' imprisonment, a fine of up to JPY 5 million, or both.

Crypto market abuse also becomes subject to administrative surcharges and to criminal investigation by the SESC, as it is for listed securities.

Tax

Tax is changing on a separate track. An amendment to the tax laws, promulgated on 31 March 2026 (Act No. 12 of 2026), introduces separate taxation for gains on crypto assets.

  • Gains on the sale of qualifying crypto assets through or to a registered trading business will be taxed separately from other income at 20% (15% national income tax and 5% local inhabitant tax). Today such gains are, as a rule, classed as miscellaneous income.
  • Losses that cannot be used in the year can be carried forward for three years, subject to conditions.
  • The new rules apply from 1 January of the year after the FIEA amendment takes effect, so no later than 1 January 2028.

The tax law uses the term "specified crypto asset" (特定暗号資産) in a different sense from the FIEA. For tax purposes, it broadly means a crypto asset whose name is recorded in the register of financial instruments businesses, in other words a token handled by a registered trading business. It is not limited to tokens with an issuer.

When the Rules Apply

The crypto provisions take effect on a date set by Cabinet Order within one year of promulgation on 23 July 2026. Businesses already operating get transitional rules.

  • An exchange registered under the Payment Services Act can continue its existing business for six months from the effective date without FIEA registration. If it applies within those six months, it can continue until the application is decided, but for no more than two years from the effective date. During that period it is treated as a registered business for most purposes, but some new requirements, including the liability reserve, do not yet apply. Within two weeks of the effective date, it must notify the authorities of its details, including the tokens it handles.
  • Businesses whose activities are newly brought into scope, such as crypto investment advice or borrowing crypto assets from users, have a similar six-month window.
  • An exchange already handling tokens on the effective date must publish the required information about those tokens within three months.
  • The new disclosure rules do not apply to offerings of specified crypto assets that began before the effective date.
  • The insider trading prohibitions apply only to material facts that arise on or after the effective date.

What to Watch

How the new rules work in practice will depend heavily on the Cabinet Order and Cabinet Office Ordinances that fill in the details. Small choices in those texts can change the outcome for a business considerably, so they need to be followed closely. The points to watch are:

  • The Cabinet Order fixing the effective date.
  • The Cabinet Office Ordinances on disclosure, on the standards for tokens that exchanges may handle, and on the size of the liability reserve.
  • The Cabinet Order designating tokens whose price or information is readily available, which decides the reach of the void-sale rule.
  • The cases set by Cabinet Order in which foreign businesses may deal with persons in Japan.
  • Registration applications by existing exchanges during the transition period.

We will publish a detailed article on each area, and follow the Order and Ordinances as they take shape.

This article is general information, not legal advice. If you run, or plan to run, a crypto business that serves customers in Japan, get in touch.

References

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