Japan’s financial watchdog is moving to overhaul crypto oversight, with the FSA‘s Financial System Review Board proposing a shift from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA), realigning crypto regulation with the framework used for investment and securities markets.

As part of the plan, exchange-led IEOs would face tightened presale disclosures under FIEA, including core team visibility, independent code audits, and incorporation of opinions from self-regulatory bodies.

Issuers, even in decentralized setups, would be required to reveal identities and detail token issuance and distribution models, boosting transparency and investor clarity.

Regulatory authorities would gain stronger enforcement powers to address unregistered platforms, including overseas operators and DEX-like venues, while insider trading would be expressly disallowed, echoing MiCA and other global standards; a parallel tax reform contemplates a 20% crypto trading levy.