Japan Moves to Boost Crypto Safety With New Liability-Reserve Rules for Exchanges
- Japan’s FSA plans to require cryptocurrency exchanges to hold liability reserves to protect users from hacks and system failures.
- High-profile breaches at exchanges including DMM Bitcoin and Bybit underscore the urgent need for stronger safeguards.
- Proposed reforms also include potential crypto reclassification, stablecoin pilot programs, and increased bank involvement to enhance market security.
The Financial Services Agency (FSA) of Japan is advancing plans to require cryptocurrency exchanges to hold reserves to cover potential losses, protecting users from hacks and technical failures. Currently, Japanese exchanges can keep customer funds in offline cold wallets, which avoids reserve obligations, but the…
