The Financial Services Agency (FSA) in Japan is preparing to significantly alter the landscape of cryptocurrency regulation. The agency plans to revamp the Financial Instruments and Exchange Act, classifying cryptocurrencies as financial products and introducing stricter insider trading regulations for this sector. This move seeks to ensure fairer market practices and enhance investor protection within the rapidly evolving digital asset space. The new legislation will prohibit trading in crypto assets based on undisclosed inside information, mirroring rules already in place for traditional financial markets. The intention is to leverage these established regulations as cryptocurrency adoption accelerates, aiming for greater oversight as participation grows. 2026 marks the year when the bill is projected to be presented to the Japanese National Diet for approval. Japan has historically been a leader in crypto regulation, imposing stringent licensing requirements for exchanges following high-profile hacks. This new legislation will continue to solidify this position.