Japan’s Financial Services Agency plans to increase maximum prison terms for unregistered crypto sales to 10 years, up from the current three years, as part of a major regulatory overhaul.
The proposal also raises fines to ¥10 million and shifts crypto oversight under the Financial Instruments and Exchange Act, aligning digital assets with traditional securities regulation.
The Securities and Exchange Surveillance Commission will gain new powers to conduct raids, seize evidence and pursue criminal cases against unlicensed operators.
The crackdown follows the SANAE TOKEN scandal and a surge in consumer complaints, with more than 500 crypto-related cases reported monthly in late 2025.
Authorities said the reforms aim to curb scams and unregulated activity, particularly in memecoins and offshore platforms targeting Japanese investors.
Alongside stricter penalties, Japan plans to introduce a flat 20% crypto tax to replace the current system that can reach 55%, improving conditions for compliant investors.
The measures position Japan among the strictest jurisdictions globally on crypto enforcement, reflecting a broader regional push toward tighter regulation.