JAPAN TODAY




 

A task force under Japan's financial watchdog has begun discussions to tighten rules on crypto assets, including measures against insider trading and steps to protect users, as authorities seek to crack down on illicit deals amid growing demand for the assets as investment products.

The working group of the Financial Services Agency plans to soon compile a report outlining the specifics of the tighter rules under the Financial Instruments and Exchange Act, which covers securities such as stocks and bonds.

In Japan, crypto assets, such as Bitcoin, are currently regulated under the Payment Services Act as a means of settlement.

According to the draft proposals, digital currencies could become subject to insider trading regulations, which would prohibit trading by those who learn of undisclosed information, such as an issuer's bankruptcy.

Operators that issue crypto assets to procure funds would be required to disclose information on supply amounts and the technologies they use, according to the draft.

The watchdog is also considering protecting users by requiring crypto asset exchange service providers to accumulate reserve funds to compensate those who suffer losses from fraudulent trading.