Japan's House of Councillors has passed a significant amendment to the Financial Instruments and Exchange Act, officially bringing crypto assets under financial regulation. The new law, enacted on July 15, introduces several key changes, including a shift from comprehensive taxation to separate taxation with a rate of approximately 20%, and allows for a three-year loss carryforward deduction. The amendment also establishes a framework for crypto asset ETFs, with the Japan Exchange Group anticipating listings by 2027. Additionally, it strengthens investor protection by introducing insider trading regulations and increasing penalties for unregistered sales from three to ten years imprisonment. Specific crypto asset issuers will be required to disclose information annually. The tax system changes are expected to take effect in fiscal 2027, applying from January 1, 2028.