Japan’s House of Councillors passes a bill classifying crypto assets as financial instruments

BlockBeats message: On July 15, Japan’s Senate plenary session passed the bills “Financial Instruments and Exchange Act” and “Payment Services Act” on July 15, redefining crypto assets from a means of payment to financial instruments.

Key amendments include: raising the maximum prison term for unregistered financial activities from under 3 years to under 10 years, and increasing fines from under 3 million yen to under 10 million yen; introducing crypto asset insider trading regulations for the first time, prohibiting trading using material information that has not been made public; and requiring certain crypto asset issuers to make periodic annual information disclosures.

In terms of taxation, it will shift from comprehensive taxation at up to 55% to filing-separated taxation (tax rate around 20%), and it will allow losses to be carried forward for 3 years. It is expected to take effect from January 1, 2028. In addition, the proposed amendments would also establish a regulatory framework to support the creation of crypto asset ETFs.