Overview
- Japan’s Financial Services Agency is developing rules that would require exchanges to hold dedicated reserves to reimburse customers after major incidents, according to Nikkei-sourced reporting.
- Reserve sizes would be calibrated to each platform’s trading volume and past incidents, and exchanges could offset part of the requirement through insurance policies.
- A separate framework would ensure customer assets are returned if an operator fails, requiring segregation of user holdings and allowing court-appointed administrators to distribute funds.
- The approach is modeled on compensation reserves long mandated for securities firms in Japan.
- The reserve plan forms part of wider reforms that include pre-registering custody and system vendors and advancing a shift to regulate many tokens under the Financial Instruments and Exchange Act.