Japanese regulator sees ban on crypto insider trading: Nikkei

According to a report, Japanese regulators plan to ban insider trading in crypto, a first for the Asian country that had one of the first exposures to digital assets.

The country’s top financial watchdog, the Securities and Exchange Surveillance Commission, will soon have the authority to investigate suspected violations and issue surcharge recommendations or criminal referrals in the case of transactions based on undisclosed information, Japanese financial publication The Nikkei reported Tuesday.

Insider trading previously did not apply to digital assets, the newspaper reported. The SESC’s parent organization, the Financial Services Agency, will discuss the details of the new regulations with the aim of adopting new laws in 2026.

The Nikkei reported that regulators will first explicitly state that trading in cryptocurrencies based on undisclosed information is prohibited, and then set more specific rules.

Insider trading is the use of non-public information to buy or sell assets. Traders with such knowledge can make profits using the information.

The first crypto insider trading case happened in 2022 in the US, when former Coinbase product manager Ishan Wahi as long as information about upcoming token listings on the exchange to his brother Nikhil Wahi and his friend, Sameer Ramani.

Nikhil Wahi and Ramani were then able to purchase the tokens before Coinbase announced their listings, and then quickly sell them for a profit. Cryptocurrencies often rise in price once they are announced for listing on the prominent exchange, in a trend called the ‘Coinbase effect’.

Japan has long been a crypto hub; The former major Bitcoin exchange Mt. Gox was based in Tokyo, which led to a large retail market in the country. But an infamous, long-running hack of the platform led to its closure in 2014, with refunds only early last year.