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Coin Geek
5 days ago
- Business
- Coin Geek
Japan's bold move: Reclassification for safer digital economy
Getting your Trinity Audio player ready... Japan's decision to reclassify digital currencies as financial products is a transformative move that has the potential to revolutionize the country's digital finance landscape. By recognizing digital assets as financial products under the Financial Instruments and Exchange Act (FIEA), the Financial Services Agency (FSA) is taking a bold step toward enhancing investor protection, increasing transparency, and fostering a more robust digital asset ecosystem. At the heart of this reclassification is a commitment to investor protection. For too long, the digital asset market has been a Wild West, with bad actors exploiting regulatory gaps to engage in market manipulation, insider trading, and other fraudulent activities. By bringing cryptocurrencies under the FIEA, the FSA aims to ensure that digital assets are subject to the same stringent rules as traditional financial instruments like stocks and bonds. This means greater oversight, stricter disclosure requirements, and tougher penalties for misconduct. One of the most significant benefits of this move is the enhanced regulation of digital currency exchanges. These platforms are the primary gateways through which investors access digital assets, but they have historically been prone to security breaches, mismanagement, and fraud. Japan has experienced this firsthand with high-profile incidents like the Mt. Gox collapse and the Coincheck hack, where investors lost millions due to poor security and oversight. By subjecting exchanges to stricter regulatory standards, the FSA is creating a safer environment for investors. Exchanges will be required to maintain robust security protocols, conduct regular audits, and ensure compliance with know-your-customer (KYC) and anti-money laundering (AML) regulations. This will not only protect investors but also help restore confidence in the market, attracting more institutional participants who were previously wary of the industry's lack of safeguards. Moreover, the reclassification could lead to significant tax reforms that benefit investors. Currently, digital currency gains in Japan are taxed as miscellaneous income, with rates reaching as high as 55%. By recognizing digital assets as financial products, the FSA could pave the way for treating digital asset gains as capital gains, which are subject to a flat tax rate of 20%. This would make digital asset investments more attractive, encouraging broader participation in the market. Another positive aspect of this shift is that it could drive the industry toward greater utility and usability. For too long, the focus of many digital currency projects has been on speculation rather than real-world value. With stricter regulations in place, exchanges and digital asset firms will be encouraged to prioritize security, transparency, and practical use cases over mere hype. This could lead to a new wave of innovation as companies strive to develop blockchain applications that deliver tangible benefits to consumers and businesses. The increased oversight could also help Japan establish itself as a leader in blockchain innovation. As exchanges and other digital asset platforms are forced to adhere to global best practices, they will become more competitive on the international stage. Japanese firms that survive the regulatory shakeout will be those that can demonstrate real-world value, offering services that go beyond simple trading. This could include blockchain solutions for payments, digital identity verification, supply chain tracking, and even decentralized finance (DeFi). Yet, this transformation will not be without challenges. Smaller digital asset firms, which have thrived in a relatively unregulated environment, may struggle to comply with the new rules. Legal fees, licensing requirements, and ongoing reporting obligations will increase their operational costs, potentially driving some startups out of the market. However, this is not necessarily a negative outcome because it signifies market maturation. Just as with traditional finance (TradFi), only the strongest, most reliable firms will thrive under stricter oversight, creating a safer environment for investors. Critics may argue that increased regulation will stifle innovation, but this perspective ignores the reality that sustainable innovation requires a secure and trustworthy foundation. A market-driven purely by speculation is a bubble waiting to burst, but one grounded in transparency, investor protection, and real-world utility is far more resilient. Japan's regulatory shift is an opportunity to transition from the Wild West of crypto speculation to a mature, well-regulated industry that can support long-term growth and adoption. Ultimately, Japan's decision to reclassify cryptocurrencies as financial products is a recognition of the growing importance of digital assets in the global financial system. It is a move that will protect investors, enhance market integrity, and drive the industry toward greater usability and innovation. While the transition may be challenging for some firms, it is a necessary step in the evolution of the digital currency market. By leading the way in regulatory innovation, Japan has the opportunity to become a global hub for blockchain technology and digital finance. Watch: It's time for regulation to enable blockchain growth title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Japan Times
17-04-2025
- Business
- Japan Times
Japanese online brokerage accounts hacked in growing scandal
A wave of unauthorized trading has hit online brokerage accounts in Japan, raising concerns that criminal groups may be using the hijacked accounts to manipulate stock prices. The breach came to light in late March, when Rakuten Securities disclosed a series of account takeovers. Nomura Securities, SBI Securities and other firms have since confirmed similar incidents. According to the companies, the attackers used phishing schemes — creating websites posing as legitimate sites to steal user IDs and passwords — to impersonate customers and execute trades without their knowledge. Initial reports indicate the attackers targeted mostly foreign stocks. Rakuten Securities temporarily suspended buy orders for select Chinese equities in response. But the impact has since spread to domestic stocks, with trading halted for some names amid suspicious activity. Investigators believe the perpetrators bought up large volumes of low-priced, volatile stocks to artificially inflate their prices and then cashed out at a profit. If confirmed, such conduct could constitute market manipulation under the Financial Instruments and Exchange Act. Brokerages are urging customers to stay vigilant as authorities step up monitoring. 'A significant number of stock prices have been tampered with — we can't ignore this,' said a source at the Securities and Exchange Surveillance Commission (SESC). The source said more than 100 stocks may have seen irregular price movements. 'I don't recall seeing account takeovers on this scale before,' the person added. Account hijacking may also fall under Japan's law prohibiting unauthorized access to computer systems. The SESC official emphasized the need to quickly identify those behind the attacks but acknowledged that 'it's difficult to do so through our investigation alone.' Cooperation with law enforcement 'may be necessary,' the person said. Police are currently gathering information. To guard against further breaches, investors are being urged to stay cautious. 'Don't click on links in emails or SMS messages without thinking,' said a spokesperson from cybersecurity firm Trend Micro. 'Using official apps from each brokerage is also an effective way to protect yourself.' Many Japanese investors are expressing confusion and frustration after discovering their brokerage accounts were hijacked. One 36-year-old man, a company employee who had used Rakuten Securities for over a decade, lost about ¥2.1 million ($14,700) in the scheme. Although he reported the incident to police, his case wasn't accepted, leaving him wondering where to turn. 'I have no idea where to bring this,' he said. 'The criminals are doing whatever they want.' The man had been carefully managing around ¥12 million in Japanese equities, setting the portfolio aside for marriage and retirement. He checked prices nearly every day. But on the morning of March 20, he noticed something was off. All of his holdings had been sold just before the market closed the previous afternoon, and the proceeds were used to buy 200,000 shares of an unfamiliar Hong Kong-based AI company. He immediately dumped the newly purchased stock, but by then, the damage was done — he was down over ¥2 million. Rakuten has warned users about fake websites used in phishing attacks, but the man insists he never entered his password on any suspicious page. When he contacted the police, he was told the brokerage — not the customer — is considered the legal victim in such cases, meaning he couldn't file a criminal complaint. He also learned it was unlikely the case would be pursued by law enforcement. A Rakuten Securities spokesperson told reporters the company would continue to cooperate with police and assess each case individually. Similar cases have been reported at other firms. A 35-year-old man using SBI Securities said his account was hijacked and used to purchase roughly ¥9.6 million in Chinese stocks without his knowledge. Transaction logs revealed that someone had logged into his account from a region he doesn't live in. But SBI Securities told him he would not be eligible for compensation as long as the correct username and password had been used. 'That means even if their security system is flawed, they take no responsibility,' the man said. 'I can't accept that.' Translated by The Japan Times
Yahoo
31-03-2025
- Business
- Yahoo
Japan's FSA Explores New Regulations To Classify Crypto as Financial Products
Japan's Financial Services Agency (FSA) is set to propose a significant reclassification of cryptocurrency assets by 2026, according to a report by Nikkei. The move aims to designate cryptocurrencies as financial products under the Financial Instruments and Exchange Act, a shift from their current classification as a means of settlement under the Payment Services Act. This regulatory change comes amid a rise in reports of cryptocurrency-related scams. The FSA intends to implement stricter regulations on companies involved in crypto investments, which would require exchanges and firms soliciting crypto investments to register with financial authorities. This proposal is part of a broader effort to enhance the oversight of local crypto service providers. The upcoming amendments are expected to introduce insider trading rules aligned with those governing traditional financial products. However, details regarding these regulations have not yet been disclosed. It remains unclear how the FSA plans to enforce these rules on foreign entities operating in Japan, particularly as the agency recently requested major platforms like Apple and Google to block five unregistered overseas crypto exchanges from their app stores. As of January 2025, Japan had approximately 7.34 million active accounts for crypto trading, highlighting the growing interest in digital assets among the Japanese populace. The FSA's proactive approach reflects a response to the increasing complexity of the crypto landscape and the need for a regulatory framework that addresses emerging risks. The proposed changes come after closed-door discussions among experts analyzing the current legal framework. Sign in to access your portfolio
USA Today
31-03-2025
- Automotive
- USA Today
US stock futures drop following fresh inflation and tariff fears
US stock futures drop following fresh inflation and tariff fears Show Caption Hide Caption Trade war? One Atlanta auto store owner says tariffs are fine by him Ernie Simmons owns an Atlanta store selling auto parts, one of the targets of U.S. President Donald Trump's latest tariff plans. His business, Aftermarket Auto Parts, relies heavily on imports from Taiwan. But Simmons says he's not worried. U.S. stock futures point to a lower open after major stock indexes plunged on Friday amid fresh inflation and tariff fears. On Friday, the Federal Reserve's preferred inflation gauge came in slightly higher than expected in February, triggering worries that the central bank's fight against elevated inflation has stalled above the Fed's 2% goal. And with President Donald Trump promising a host of tariffs on April 2, inflation may not reach 2% for some time, econoomists said. Tariffs would increase prices, instead, they said. A 25% tariff on all cars not made in America and auto parts are set to kick in on April 2, along with a plan for reciprocal tariffs. Uncertainty over whether further tariffs will be broad or targeted has whipsawed the market. Broad tariffs that last a while would damage the economy and boost inflation, economists said. Over the weekend, Trump said little to assauge investors. He said in a NBC interview he 'couldn't care less' if foreign automakers raise their prices due to these new tariffs. On Sunday, the Wall Street Journal reported Trump wanted his advisors to be more aggressive with setting tariffs. "Markets often sell off on uncertainty (ahead of major events) and recover on certainty (the actual event/news)," wrote Larry Tentarelli, chief technical strategist and founder of Blue Chip Daily Trend Report. "The April 2 deadline could be a major directional catalyst for most global markets, in either direction." Still, "we give recession odds in 2025 a 25-30% probability," he said. At 6:10 a.m. ET, futures linked to the blue-chip Dow fell -0.64%; while broad S&P 500 futures dropped -0.93% and tech-heavy Nasdaq futures slid -1.32%. Cryptocurrency Japan's Financial Services Agency (FSA) plans to revise the Financial Instruments and Exchange Act to give crypto assets a legal status as financial products, the Nikkei business daily said on Sunday, without citing sources. As part of the move, crypto assets will be put under insider trading restrictions that prohibit buying and selling based on undisclosed internal information, the Nikkei said. The FSA could send a bill to amend the legislation to Japan's parliament as early as next year, the report said. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
Yahoo
31-03-2025
- Business
- Yahoo
Japan Mulls Reclassifying Crypto as a ‘Financial Product' to Curb Insider Trading: Report
Japan's Financial Services Agency (FSA) plans to reclassify cryptocurrencies as financial products under new rules, aimed at curbing insider trading in the digital asset market, per a Nikkei report on Sunday. The move comes as part of a broader effort to strengthen oversight in Japan's crypto ecosystem, which has witnessed growing adoption alongside a rise in fraudulent activities. The FSA intends to submit amendments to the Financial Instruments and Exchange Act (FIEA) to Japan's parliament as early as 2026, following a detailed review conducted by experts behind closed doors. Cryptocurrencies are currently categorized as a "means of settlement" under the Payment Services Act, a designation that has governed their use primarily as a payment tool rather than as investment vehicles. However, this existing classification has left gaps in regulatory oversight, particularly concerning activities like insider trading. As such, specific details about the insider trading rules — such as what constitutes insider information in the crypto context or the penalties for violations — have not yet been disclosed, leaving room for further clarification as the proposal takes shape. Sign in to access your portfolio
