JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
Operational Regulations The operational regulations applicable to CAESPs under the current framework, including the self-reg - ulatory rules established by the Japan Virtual and Cryptoassets Exchange Association (JVCEA), are generally aligned with those for Financial Instruments Business Operators under the FIEA. Nonetheless, the FSC Report notes that the following new initiatives are being explored: • elevating regulations currently set at the self-regu - latory level to statutory regulations; • introducing a more effective and stringent regula - tory framework to curb illegal solicitation activities by unregistered operators; and • expanding the scope of regulations to include investment management and advisory activities involving crypto-assets in spot markets. Insider Trading Regulations Under the current regulatory framework, there are no explicit provisions that directly regulate insider trad - ing related to crypto-assets. In this regard, the FSC Report is considering several approaches, such as introducing specific provisions similar to insider trad - ing regulations for listed securities under the FIEA, with the aim of specifically categorising and defining the types of conduct that are prohibited. In Japan, almost every area of finance has been ben - efiting from robust fintech innovation. Online or mobile payment services, cryptocurrency-based businesses and other blockchain-based tokens, robo-advisers and financial account aggregation services that uti - lise OpenAPI (Application Programming Interface) are among the predominant sectors. One indication that the fintech business is maturing is the shift in major players from fintech start-ups to well-established companies (such as traditional major financial institutions and telecommunications compa - nies). 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models
• protecting users and addressing unregistered operators; • addressing misconduct in investment management and related activities; and • ensuring fairness in price formation and trading activities. Given the similarity of these challenges to those tra - ditionally addressed under the Financial Instruments and Exchange Act (FIEA), regulators are currently con - sidering the utilisation of existing mechanisms under the FIEA to tackle these problems. A revised bill for amendment of the PSA, based on this FSC Report, is expected to be submitted to the Diet in the first half of 2026. Should the bill be passed, it is anticipated to be enacted in the first half of 2027. Classification of Crypto-Assets The FSC Report categorises crypto-assets into the following two types, while acknowledging the pos - sibility of overlap between categories due to design, These are crypto-assets issued as a means of fund - raising, with the raised capital utilised for projects or other business activities. These tokens are typically issued through initial exchange offerings for the pur - pose of funding specific projects, and the issuers of such offerings are clearly identifiable. Because cen - tralised crypto-assets are intended as a means of rais - ing funds for business activities, regulators are now considering the imposition of information disclosure obligations on issuers of centralised crypto-assets. Decentralised crypto-assets modification, and the like. Centralised crypto-assets These are crypto-assets that do not constitute cen - tralised crypto-assets, such as BTC, ETH and meme coins. Regulators are now considering the imposition of regulations aimed at preventing harm caused by fraudulent solicitation activities. With regard to decentralised crypto-assets, the issu - ers of which are often indeterminate, regulators are now considering the imposition of obligations on CAESPs that handle such assets to explain and pro - vide specified information on such assets to investors.
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