Japan Crypto Regulations: FSA Tightens Lending & IEO Rules
Japan’s Financial Services Agency (FSA) will reclassify crypto lending and IEOs under the Financial Instruments and Exchange Act from 2026. Under the new Japan crypto regulations, all crypto lending platforms must register as exchanges, implement cold wallet custody, segregate customer funds, and disclose price and credit risks. Staking services and sub-lenders face mandatory risk management. For IEOs, investment caps limit individual subscriptions to ¥500,000 or 5% of an issuer’s revenue (up to ¥2 million); larger raises require audited financials and revenue-based caps. Traders should watch for detailed guidance, as tighter oversight may reshape lending protocols and token offerings while enhancing market stability.
Neutral
While the new regulations increase compliance costs and impose lending and investment limits that may reduce short-term yield opportunities and token issuance, they also strengthen custody, risk disclosures, and investor safeguards. This clarity can attract institutional funds and improve market stability over time. As a result, the immediate effect on crypto prices is likely muted, yielding a neutral impact on market sentiment.