Japan's Financial Services Agency: Exchanges must establish compensation reserves to prevent a repeat of hacking incidents.

Regarding the recent frequent hacking incidents at global Crypto Assets exchanges, the Japan Financial Services Agency (FSA) is also strengthening its response and requiring domestic exchanges to establish a “compensation reserve fund” to ensure that operators can promptly compensate users for losses in the event of future cybersecurity incidents. The related policy direction will be formally proposed by the Financial System Council this Wednesday (11/26).

Japan's FSA plans to amend regulations to require operators to establish compensation reserves.

According to reports, Japan's Financial Services Agency plans to revise the management requirements for local crypto assets exchanges, focusing on the introduction of a “responsibility reserve” system. This means that exchanges operating in Japan will have to prepare a pool of funds in advance to be available for compensation in the event of user asset damage caused by hacking or other unforeseen incidents.

The FSA emphasized that this move is in response to the recent incidents of large exchanges being hacked in the international market, and that Japan needs to establish a clearer and more immediate compensation mechanism in advance to ensure that users' assets are not affected.

Japan FSC will release a report on 11/26, serving as the basis for subsequent legislative amendments.

The advisory unit of the FSA, the “Financial System Council” (FSC), is expected to release an official report after the regular meeting this Wednesday (11/26), which will include multiple management recommendations, such as requiring Crypto Assets operators to establish compensation reserves.

This report will become a core reference for subsequent policy adjustments and legislative amendments, making Japan's Crypto Assets regulatory system more comprehensive.

The Japanese FSA is reviewing whether banks can hold coins, and relevant regulations are being discussed simultaneously.

In addition to strengthening the compensation mechanism of the crypto assets exchange, the FSA is also discussing another system, namely whether to allow banks in Japan to purchase and hold crypto assets.

This issue is still under review and has not yet been publicly announced in terms of specific direction, but the FSA has indicated that it will review it in conjunction with the overall regulatory framework.

( Japanese exchange warning: If a company dares to transform into DAT, it will limit your fundraising space )

Japan's Crypto Assets market has a large user base, and the demand for regulation is increasing.

Japan ranks among the top in the world for the population using Crypto Assets. According to FSA statistics, as of February this year, the number of Crypto Assets trading accounts in Japan has reached approximately 12 million, accounting for a significant proportion of about 123 million people, indicating a high level of activity in the local market. This also makes the strengthening of regulatory measures and compensation systems even more necessary.

( The Japan Financial Services Agency's new regulations submitted for review in 2026 mandate the disclosure of 105 types of coins and prohibit insider trading )

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