Japan Moves Crypto Under Financial Law, Toughens Penalties For Fraud

Japan had over 13 million crypto accounts when its financial regulator started fielding more than 350 fraud complaints every month. Those numbers helped push the government toward a major regulatory overhaul — one that officially cleared the cabinet this week.

For years, crypto in Japan was governed under the Payment Services Act, a framework built around digital money and transactions rather than investment activity.

Finance Minister Satsuki Katayama addressed reporters after the cabinet approved the bill. “In response to changes in financial and capital markets, we will expand the supply of growth capital while ensuring market fairness, transparency, and investor protection,” she said.

The Financial Services Agency had been signaling this shift since late 2025. The cabinet’s approval this week moves that plan out of the proposal stage and into formal legislation.

JUST IN: Japan officially approves bill to recognize cryptocurrency as a financial asset.

The changes also come with new paperwork requirements. Issuers will be required to file annual disclosures, bringing them closer in line with publicly listed companies.

Registered firms will also be renamed, from “crypto asset exchange operators” to “crypto asset trading operators” — a small change in language that reflects the larger shift in how the government now views the industry.

Whether the law takes effect in fiscal year 2027 depends on the current parliamentary session. If passed during the ongoing session, that timeline holds. Reports indicate the FSA has been laying the groundwork for this transition for months.

Featured image from PlanetofHotels.com, chart from TradingView