Japan's Financial Services Agency (FSA) has proposed reclassifying Ethereum and other major cryptocurrencies as financial products, which would subject them to securities regulation under the Financial Instruments and Exchange Act. This proposal, currently under government review and expected to be finalized by mid-2025, aims to enhance market integrity and investor protection. If implemented, the reclassification could introduce a 20% capital-gains tax and require mandatory disclosures for these digital assets. The FSA is actively seeking feedback from institutional entities and the public before the proposal proceeds to Cabinet and Parliamentary review.