Japan’s Financial Services Agency proposes tighter crypto regulations, recommending regulating cryptocurrencies under the Financial Instruments and Exchange Act for increased investor protection and aligning oversight with securities regulations. The report highlights issues in crypto investments like unclear white papers, investment scams, and security concerns within exchanges.

Crypto plays a significant role in Japan’s economy, with over 12 million accounts at domestic exchanges and user deposits exceeding $33.7 billion. Despite this, small-scale trading dominates, with over 80% of individual accounts holding less than $675. The FSA notes that 7.3% of investors hold crypto, more than FX or corporate bonds.

Finance Minister Katsunobu Kato recognizes cryptocurrencies as a diversification option for investment portfolios, emphasizing the need for a proper investment environment for crypto assets. Meanwhile, under the FIEA, crypto is already treated as a financial instrument, imposing disclosure requirements on issuers and regulating intermediaries and brokerages.

The FIEA rules would eliminate information asymmetry between issuers and investors, regulate intermediaries, enforce rules against unfair trading, and provide enforcement measures like emergency injunctions against unregistered businesses. The proposal aims to address key issues in crypto investments and enhance regulatory oversight.

Read more at Cointelegraph: Japanese Regulator Proposes Deep Rework of Crypto Regulation