Key Takeaways
Who will enforce the rules?
The SESC, under the supervision of the FSA, can investigate violations and impose surcharges.
Why is this important?
It strengthens supervision of a market that previously relied on self-regulation, increasing investor confidence.
Global sentiment around crypto regulation continues to diverge, with some countries embracing digital assets while others tighten their grip.
Japan is the latest country to take a firmer stance, as its top financial regulator moves to ban insider trading in cryptocurrencies.
The Japanese crypto step back
According to Nikkei Asiathe Securities and Exchange Surveillance Commission (SESC) will soon be given the authority to investigate suspicious cases and impose surcharges based on illegal profits.
The move marks a policy change. 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 the end of the year and amend the Financial Instruments and Exchange Act (FIEA) next year.
The revised FIEA gives the SESC the authority to investigate and punish illegal trafficking. It bans trading in undisclosed information and brings crypto regulations in line with securities law.
However, defining what constitutes “inside knowledge” in crypto remains complex, especially for tokens without clear issuers.
Still, Japan’s move follows a global trend toward increased surveillance, with the EU and South Korea already setting up frameworks to tackle market manipulation and insider trading.
Metaplanet’s market value is falling
This coincided with Metaplanet Inc., to see the market value drops below Bitcoin [BTC] reserves.
According to Bloomberg, the Tokyo-listed company, which started buying Bitcoin in April 2024, has lost more than 70% of its share value since June, dropping its market value to Bitcoin ratio to 0.99.
With over 30,000 BTC worth $3.4 billion, the company recently raised $1.4 billion to expand its holdings as broader market volatility increased following Trump’s tariff comments on China.
Japanese crypto adoption
But despite such declines, Japan’s crypto adoption is accelerating, even under increased scrutiny.
Chain analysis data showed a 120% year-on-year increase in value received across the chain, better than peers such as Indonesia, South Korea and India.
Policy reforms, including crypto taxes, yen-backed stablecoin licensing, and investment recognition, are fueling this growth.