Japan’s Legislative Push May Accelerate Global Crypto Insider-Trading Rules, Could Affect Solana Markets

• Legislative change will bring securities-style rules to crypto under the FIEA, giving the SESC investigatory and enforcement tools.

• Framework expected to be finalized in 2025 and submitted to parliament by 2026, creating regulatory clarity for market participants.

• Observers say the move could prompt international alignment with EU and other regional standards and shift enforcement norms globally.

Japan crypto insider trading: FSA to give SESC securities-style powers over tokens; framework due this year and to be sent to parliament by 2026. Read COINOTAG

Published: 2025-10-17 | Updated: 2025-10-17 | Author: COINOTAG

How is Japan cracking down on crypto insider trading?

Japan crypto insider trading enforcement will shift from regulatory gray areas to statutory clarity by extending the Financial Instruments and Exchange Act (FIEA) to selected digital assets. The Financial Services Agency (FSA) plans to empower the Securities and Exchange Surveillance Commission (SESC) with securities-style investigatory powers, enabling probes, surcharges and criminal referrals for trades based on undisclosed information.

What powers will the SESC gain under the FIEA?

The proposed framework grants the SESC authority to detect suspicious trading patterns, open investigations, and recommend administrative surcharges or criminal action where evidence supports misuse of undisclosed information. The rules would effectively treat certain tokens and token trading as subject to market-integrity safeguards similar to equities. The framework is slated to be finalized in 2025 and submitted to Japan’s parliament by 2026. Observers point to the FSA’s official proposal language and public consultations as the primary sources for the timeline and scope.

Frequently Asked Questions

Will the new rules apply to all cryptocurrencies or only specific tokens?

The draft approach targets tokens that function like securities under the Financial Instruments and Exchange Act. Not all cryptocurrencies will automatically fall under the rule; applicability will depend on how a given token is characterized under FIEA definitions and the rule text finalized by the FSA.

How will this change affect global exchanges and compliance teams?

Many compliance teams will treat Japan’s move as a signal of rising global standards for market integrity. Companies operating across jurisdictions may harmonize internal controls to align with securities-style obligations in Tokyo and with parallel frameworks such as the EU’s market rules. The change is likely to increase due diligence and trade surveillance requirements for firms handling tokenized assets.

Context and Expert Views

Japan’s decision represents a legislative-first model in which lawmakers place crypto insider-trading prohibitions explicitly inside the FIEA. Policy experts and industry leaders told industry reporters that this approach offers clarity contrasted with jurisdictions that rely primarily on enforcement action and case law.

Cessiah Lopez, head of policy and research at Superteam UK, said the move could “add pressure for a clearer federal framework” in the United States, which has generally handled crypto insider trading by reference to existing securities law on a case-by-case basis. Lopez told COINOTAG that harmonizing protections against insider trading would support market integrity and strengthen public trust in digital markets.

John Park, head of Korea at the Arbitrum Foundation, said the legislative clarity creates a “gravitational pull” that may make rulebooks in Tokyo and Brussels more legible to institutional actors. Park observed that compliance teams standardizing around MiCA in Europe will find Japan’s FIEA changes understandable in practice.

Sam Seo, chairman at the Kaia DLT Foundation, added that codification of insider trading as a crime could shift enforcement norms by making clear the liability for trading on confidential information. He told industry reporters that integrity will become a baseline requirement for token markets.

Key Takeaways

• Statutory clarity: Japan will extend the FIEA to cover certain digital assets, making insider trading prohibitions explicit for applicable tokens.
• Enhanced enforcement: The SESC will receive securities-style investigatory and referral powers to address illicit token trading.
• International effect: The move may encourage regulatory convergence with the EU and influence compliance norms in other major markets.

Conclusion

Japan’s legislative-first approach to crypto insider trading marks a significant step toward aligning digital-asset oversight with traditional market integrity rules. By extending the FIEA and empowering the SESC, regulators aim to reduce information asymmetries and increase enforcement consistency. Market participants should prepare for stricter trade surveillance and governance expectations as the framework advances through finalization in 2025 and parliamentary submission by 2026. For ongoing coverage and analysis, COINOTAG will monitor developments and publish updates as proposals evolve.

Sources: Financial Services Agency (FSA) public proposals; Securities and Exchange Surveillance Commission (SESC) policy briefings; statements reported by COINOTAG; expert comments from Superteam UK, Arbitrum Foundation, and Kaia DLT Foundation.