Japan expands insider trading rules to crypto: Report

Key Takeaways

Who will enforce the rules?

The SESC, overseen by the FSA, can investigate violations and impose surcharges.

Why is this important?

It strengthens oversight in a market that previously relied on self-regulation, boosting investor confidence.

Global sentiment around crypto regulation continues to diverge, with some nations embracing digital assets while others tighten their grip.

Japan is the latest to take a firmer stance, as its top financial regulator moves to outlaw insider trading in cryptocurrencies.

Japan’s crypto step back

According to Nikkei Asia, the Securities and Exchange Surveillance Commission (SESC) will soon gain the authority to probe suspected cases and impose surcharges based on illicit gains.

The move marks a policy shift. Japan’s insider trading framework, once limited to securities, now includes digital assets.

According to reports, the Financial Services Agency (FSA) plans to finalize the framework by year-end and amend the Financial Instruments and Exchange Act (FIEA) next year.

The revised FIEA empowers the SESC to investigate and penalize illicit trades. It bans trading on undisclosed information and aligns crypto rules with securities law.

However, defining what constitutes “insider information” in crypto remains complex, especially for tokens without clear issuers.

Yet, Japan’s move follows a global trend toward tightening oversight, with the EU and South Korea already establishing frameworks to tackle market manipulation and insider trading.

Metaplanet’s market value drops

This coincided with Metaplanet Inc., seeing its market value drop below its Bitcoin [BTC] reserves. 

According to Bloomberg, the Tokyo-listed company, which began buying Bitcoin in April 2024, has lost over 70% of its share value since June, bringing its market-value-to-Bitcoin ratio down to 0.99.

Holding over 30,000 BTC worth $3.4 billion, the firm recently raised $1.4 billion to expand its holdings as broader market volatility deepened after Trump’s tariff remarks on China.

Japan’s crypto adoption

Yet despite such downturns, Japan’s crypto adoption is accelerating even amid tighter oversight.

Chainalysis data showed a 120% year-over-year surge in on-chain value received, outpacing peers like Indonesia, South Korea, and India.

Policy reforms, spanning crypto taxation, yen-backed stablecoin licensing, and investment recognition, are fueling this growth.