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Japan Moves to Require Crypto Exchanges to Hold Customer-Compensation Reserves

The FSA says the plan would mirror securities-style protections to speed reimbursements after hacks.

Overview

  • The Financial Services Agency plans to submit a 2026 bill mandating liability reserves for crypto platforms, with required amounts modeled on securities firms’ ¥2–40 billion tiers based on business scale.
  • Exchanges could satisfy part of the obligation through insurance, according to reports citing the draft framework under discussion.
  • The overhaul would end the cold‑wallet exemption and establish court‑managed procedures to return assets in bankruptcies, alongside stricter asset segregation rules.
  • Regulators are weighing preregistration or prior‑notice requirements for wallet‑management vendors after breaches tied to outsourced software, including DMM Bitcoin’s 2024 loss and a recent incident linked to SBI Crypto addresses.
  • In parallel, officials are preparing a reclassification that would bring major tokens under the Financial Instruments and Exchange Act, with local reports pointing to a curated list of about 105 assets and a proposed 20% flat tax, while asset managers like SBI, Nomura, Daiwa and Mitsubishi UFJ ready ETFs and investment trusts pending rule changes.