According to CoinPost, during the Japan Senate’s plenary session, the amendments to the Financial Instruments and Exchange Act and the Act on the Funds Settlement were passed. For the first time, cryptocurrencies were formally defined at the legal level as “financial products.” To enhance investor protection, Japan for the first time introduced insider trading supervision in the cryptocurrency sector, prohibiting trading using material information that has not been made public, and granting investigation authority to supervisory committees such as the Securities and Exchange Surveillance Commission; at the same time, it increased the maximum penalty for unlicensed operations to 10 years’ imprisonment or a fine of 10 million yen. For issuers of “specified crypto assets,” the amendments introduce mandatory annual information disclosure requirements.

Regarding tax reform, the bill would promote a shift in cryptocurrency gains from the current comprehensive taxation (maximum tax rate of 55%) to separately filed withholding-based taxation (tax rate of about 20%), and supports loss offsets for a 3-year period. It is expected to take effect on January 1, 2028. In addition, the proposed amendments would also establish an institutional framework to support cryptocurrency ETFs.