Japan Plans to Crack Down on Crypto Insider Trading With New Strict Law

• Japan’s Financial Services Agency (FSA) plans to ban insider trading in cryptocurrencies.
• If the new law is established, offenders caught using secret information for profit will face fines based on their illegal gains and could also be prosecuted. 

Japan is getting ready to introduce a very strict rule that would completely put an end to insider trading. A few hours ago, news spread that the Financial Services Agency (FSA), responsible for overseeing financial matters in Japan, shared that they plan to establish a new rule and system that would monitor insider cryptocurrency trading.

According to the details shared, the new rules would make insider trading in cryptocurrencies illegal. Prior to this new development, Japan had established proper regulations to protect the daily use and trading of cryptocurrency. Although the rules are not essentially too strict, the financial bodies have managed to put different laws in place to make sure citizens are protected and their assets are compliant with local financial rules. So this new addition just goes to show the country’s dedication to creating a sector for cryptocurrency and also protecting users. 

The Details Of Japan’s New Law That Aims at Ending Crypto Insider Trading 

The details of the report were shared by Nikkei Asia, and according to the details, the country plans to create a system that would monitor crypto trading, and if anyone is caught using secret or private information to make profits from crypto trades, the individual or parties involved will have to pay a fine based on how much money they gained from it. 

The new rules will give the Securities and Exchange Surveillance Commission (SESC) more power to investigate any form of suspicious trading activities in the crypto market. The SESC would also be able to recommend penalties for the defaulters and even refer serious cases to criminal prosecutors. So basically, if someone is found using insider information to trade crypto, they could not only face heavy fines but might also be taken to court.

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The Financial Services Agency (FSA), which is the government body that oversees the SESC, plans to finalize these new rules by the end of the year. As of the time of writing, it is recorded that a working group first wants to discuss all the details before submitting the proposed changes to the FIEA during the next regular parliamentary session. And if these changes are approved, they will officially bring cryptocurrencies under Japan’s insider trading laws, just like traditional stocks.

One of the major challenges that the Japanese authority would likely face is that many cryptocurrencies do not have a single identifiable issuer. Unlike traditional companies that issue stocks, it is more difficult to really identify who an insider is. However, by creating clear laws and giving the SESC more authority, Japan stands a high chance of closing this gap and bringing greater accountability to its growing crypto industry.

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