Japan is preparing a comprehensive regulatory framework targeting insider trading within its cryptocurrency market. The Financial Services Agency (FSA) aims to prohibit trading based on non-public information in the crypto sector. This new law, which would impose penalties proportionate to illicit profits made from such actions, will be enforced by the Securities and Exchange Supervision Commission (SESC). They will also have the authority to investigate suspicious transactions and recommend fines or criminal penalties. The FSA plans to finalize regulations and propose legislation for next year’s parliamentary session. This new regulatory framework comes after Japan’s Financial Instruments and Exchange Act does not currently have provisions specifically addressing crypto asset insider trading, leaving oversight largely dependent on self-regulation of exchanges and industry associations. However, regulators acknowledge that defining insider trading in crypto assets is more complex due to the lack of a clear issuer for many tokens, adding an extra layer of difficulty. This move reflects Japan’s effort to align its cryptocurrency market with traditional financial standards.