Bitcoin News Today: Japan Balances Crypto Innovation with Investor Safeguards in Regulatory Overhaul

Japan Exchange Group (JPX) is advancing plans to tighten regulations on publicly traded companies that prioritize cryptocurrency accumulation, signaling a shift in oversight for the nation's digital-asset treasury (DAT) sector. The move follows a wave of volatility in DAT stocks, with firms like Metaplanet and Convano experiencing steep declines in share prices after earlier gains. JPX is reportedly considering enhanced audit requirements and stricter prohibitions on backdoor listings to mitigate risks tied to crypto-heavy balance sheets, according to sources familiar with the discussions.

The proposed measures aim to address governance concerns and protect retail investors who flocked to DAT stocks earlier in the year. Metaplanet, Japan's largest DAT firm with over 30,823 BTC in its treasury, saw its shares plummet 82% from a May high of $15.35 to $2.66 by late 2025. Similarly, Convano, a nail salon operator with a Bitcoin portfolio of 21,000 BTC, dropped 60% from its August peak, mirroring broader sector distress. These declines have prompted JPX to scrutinize corporate strategies that pivot to crypto accumulation without robust shareholder approvals or transparency according to recent analysis.

JPX's review comes amid a regulatory overhaul of Japan's crypto custody framework. The Financial Services Agency (FSA) plans to enforce mandatory registration for all crypto custody providers by 2026, closing loopholes that allowed exchanges to outsource operations to unregulated third parties. This follows the 2024 hack of DMM Bitcoin, which exposed vulnerabilities in the sector and led to losses of ¥48.2 billion ($312 million). The new rules will require custodians to meet government security standards, aligning with Japan's broader push to lead in digital finance while safeguarding user assets.

The exchange group is also examining whether to extend its existing backdoor listing ban to DAT companies. Currently, JPX prohibits private firms from bypassing traditional IPO processes by acquiring listed shells. Extending this rule to crypto-focused pivots would prevent firms from exploiting regulatory gaps to enter the market as DAT entities. This measure is intended to promote fairer access and reduce speculative influxes that have led to investor losses.

Industry experts note that Japan's approach reflects global trends toward stabilizing crypto markets. "Enhancing scrutiny on treasury strategies will foster sustainable growth in the DAT space, balancing innovation with investor safeguards," said a Tokyo-based financial analyst. The FSA's recent approval of a yen-backed stablecoin, JPYC, and its support for pilot projects involving major banks further underscore Japan's dual focus on innovation and security.

For now, at least three listed companies have paused crypto-buying plans since September, citing regulatory uncertainty. JPX has not yet announced final rules but emphasized its commitment to monitoring firms "that raise concerns from a risk and governance perspective" according to regulatory filings. As the regulatory landscape evolves, companies must navigate tighter compliance requirements while adapting to a market where crypto volatility remains a persistent challenge.