Japan Mandates Crypto Exchanges to Hold Liability Reserves for User Protection
Japan's Financial Services Agency (FSA) is tightening regulations on cryptocurrency exchanges, requiring them to maintain dedicated liability reserves. The move aims to safeguard users against hacks, exchange failures, and operational risks—echoing lessons from the Mt. Gox collapse.
The proposed bill, slated for parliamentary review in 2026, WOULD enforce capital buffers to cover customer losses from cyberattacks or fraud. While existing rules mandate cold wallet storage, the new reserve requirement closes a critical gap in investor protection.
Reserve thresholds remain under discussion but are expected to align with traditional finance standards. The policy underscores Japan's push to balance innovation with systemic stability in digital asset markets.
