The Japanese government has approved an amendment to the Financial Instruments and Exchange Act (FIEA) that classifies crypto assets as financial products.

The bill introduces prohibitions on insider trading, requires annual disclosures by issuers, and imposes significantly harsher penalties for unlicensed operators. If passed during the current parliamentary session, the law would take effect as early as fiscal year 2027.

The Financial Services Agency (FSA) previously regulated crypto under the Payment Services Act, treating digital assets primarily as payment instruments. However, this will shift to the FIEA amid growing use of crypto for investment purposes, Nikkei reported.

Finance Minister Satsuki Katayama spoke at a…