Woofun AI reports that the Japanese Senate plenary session approved the "Amendment to the Financial Instruments and Exchange Act and the Fund Settlement Act," officially reclassifying crypto assets as financial products rather than payment means. The legislation mandates renaming exchange operators to trading operators, increases maximum prison terms for unregistered sales from under 3 years to under 10 years, and raises fines from under 3 million yen to under 10 million yen. It also introduces prohibitions on insider trading using undisclosed material information and requires specific issuers to provide annual disclosures.

Taxation reforms shift crypto gains from a 55% comprehensive rate to a separate declaration tax of approximately 20%, with losses carry-forward allowed for three years, scheduled for implementation on January 1, 2028. The bill establishes a framework for crypto asset ETFs, with the Japan Exchange Group expected to facilitate listings around 2027. Future regulatory focus will involve formulating government orders and supervisory guidelines regarding reserve levels and derivative leverage limits.