"Japan’s FSA seeks tougher penalties for unregistered crypto sales…up to 10 years in prison"

Japan’s Financial Services Agency (FSA) is pushing a plan to substantially tighten penalties for unregistered virtual asset (cryptocurrency) operators.

According to crypto-focused media outlet Odaily on the 16th, the FSA is reviewing a proposal to shift rules governing unregistered virtual asset sales from the Payment Services Act to the Financial Instruments and Exchange Act. The move is said to be aimed at strengthening investor protection.

Under the proposed rules, criminal penalties for selling virtual assets without registration are expected to rise sharply. Currently, violators face “up to 3 years’ imprisonment or a fine of up to ¥3 million,” but the revision could strengthen this to “up to 10 years’ imprisonment or a fine of up to ¥10 million (or both).”

The Securities and Exchange Surveillance Commission in Japan is also expected to be granted stronger investigative powers. These reportedly include criminal-investigation authorities such as on-site inspections and seizure of evidence.

In addition, the FSA is considering changing the statutory name for registered operators from “virtual asset exchange service provider” to “virtual asset trading service provider.”

Meanwhile, the discussion on tightening regulation is said to be driven by a rise in disputes involving highly speculative memecoins. Japanese media reported that as disputes tied to memecoin investments have increased recently, calls have grown for stronger regulation.