Japanese Regulator Moves to Ban Crypto Insider Trading

_{Photo credit: Clay Banks / Unsplash.com}

Japan’s financial authorities are reportedly preparing to explicitly ban insider trading in the cryptocurrency market.

The Securities and Exchange Surveillance Commission (SESC) would gain powers to investigate suspicious crypto trades and impose fines tied to illicit gains; severe cases may be referred for criminal prosecution. The move would require amending the Financial Instruments and Exchange Act (FIEA), which currently does not cover cryptocurrencies in its insider-trading provisions.

The parent regulator, the Financial Services Agency (FSA), is expected to establish a working group by the end of 2025 to develop the regulatory details and then submit proposed amendments to parliament in 2026. 

Importantly, in April 2025, the FSA published a discussion paper outlining a review of cryptoasset regulations, which included the possibility of treating “insider trading” of cryptoasset transactions under future rules.

Further support for the policy comes from earlier reporting that the FSA aims to reclassify cryptoassets under the FIEA, thereby subjecting them to existing securities-style regulations, including insider trading bans.

If these plans materialize, Japan would align crypto markets more closely with traditional financial systems, strengthen investor protections, and close regulatory gaps that currently allow unfair trading based on non-public crypto information.