Japan's financial regulator plans to reclassify cryptocurrencies as “financial products” under new rules designed to stem insider trading activity.
The Financial Services Agency (FSA) in Japan is looking to crackdown on illegal insider trading that is taking place in the digital asset market, according to local media reports.
The move is part of a broader effort to bring more oversight to Japan's crypto market, where people trade Bitcoin (BTC), Ethereum (ETH), and other digital assets.
However, alongside crypto trading, there has been a steady rise in fraudulent activities in Japanese markets, according to the regulator.
Consequently, the FSA plans to submit amendments to the “Financial Instruments and Exchange Act (FIEA)” that requires the support of Japan's parliament.
Crypto is currently categorized as a “means of settlement” under Japan’s “Payment Services Act,” a designation that treats digital assets as a payment tool rather than an investment.
The FSA says this classification has left gaps in regulatory oversight, particularly concerning activities such as insider trading. And that has paved the way for illegal activities to proliferate.
Details about the insider trading rules, such as what constitutes insider information in the crypto context or the penalties for violations, have not yet been finalized of disclosed by the FSA.
Bitcoin is currently trading at $82,000 U.S.
