Japan’s Financial Services Agency is planning a sweeping regulatory overhaul that will shift crypto asset supervision from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), the legal framework governing securities trading and disclosures.
A comprehensive report from the Financial System Council’s Working Group argues that cryptocurrencies are increasingly treated as investment products, making it necessary to adopt a stricter investor-protection regime similar to traditional securities markets.
Under the proposed changes, initial exchange offerings (IEOs) would face robust pre-sale disclosure requirements, including transparent details about the team behind the project and how tokens are issued and distributed. Exchanges would also be responsible for conducting third-party code audits and gathering feedback from self-regulatory organizations.
Meanwhile, issuers — even decentralized ones — would be required to clearly disclose their identities and operational mechanisms.
Regulators believe shifting crypto into the FIEA structure will ensure timely information, reduce risks, and align Japan with global standards as digital assets increasingly mirror traditional securities trading.
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