Japan Plans to Ban Crypto Insider Trading Under Revised FIEA in 2026
Japan’s Financial Services Agency (FSA) will amend the Financial Instruments and Exchange Act (FIEA) by 2026 to explicitly ban crypto insider trading based on undisclosed information—such as exchange listing plans and security vulnerabilities. The move authorizes the Securities and Exchange Surveillance Commission (SESC) to investigate suspicious trades, impose fines and refer cases for criminal prosecution. A response to a 120% surge in on-chain activity and rising retail exposure (7.9 million active accounts), these regulatory reforms aim to close self-regulation gaps, boost market integrity and investor confidence, and attract institutional participation. Final proposals are expected by year-end, with legislative amendments submitted to parliament in 2026. Experts say the rules could set a global standard and align Japan’s regime with Europe’s MiCA framework, potentially extending to DeFi transactions depending on statutory definitions.
Bullish
Banning crypto insider trading under Japan’s revised FIEA is likely to have a bullish impact on market sentiment. In the short term, traders may view the clear enforcement powers granted to the SESC and the explicit prohibition of insider trading as a signal of improved regulatory certainty, boosting trading volumes and price support. Over the long term, enhanced market integrity and investor confidence—coupled with the potential alignment with Europe’s MiCA framework and inclusion of DeFi—should attract institutional participation and capital inflows, underpinning sustained crypto price appreciation.