Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnSquareMore
Japan Sets Out to Rebuild Investor Confidence in Crypto Following Significant Security Breaches

Japan Sets Out to Rebuild Investor Confidence in Crypto Following Significant Security Breaches

Bitget-RWA2025/11/25 06:12
By:Bitget-RWA

- Japan's FSA will mandate crypto exchanges to hold liability reserves proportional to trading volumes and security risks, modeled after traditional securities safeguards. - The reform responds to major breaches like the 2024 DMM Bitcoin hack ($312M stolen) and allows exchanges to offset reserve costs via insurance policies. - New rules require segregating user funds from corporate assets and reclassify crypto as securities under the Financial Instruments Act to enable investment products. - Experts view t

Japan’s Financial Services Agency (FSA) is preparing to implement a significant new rule that will require cryptocurrency exchanges to hold liability reserves, aiming to shield investors from losses caused by hacks or operational mishaps. Inspired by protections in place for conventional securities companies,

that have undermined public trust in the unpredictable crypto sector. Lawmakers are expected to receive a bill enshrining this regulation during the 2026 parliamentary session .

This move from the FSA follows several notable breaches, such as

, where cybercriminals exploited a flaw in an external software provider, resulting in the theft of roughly $312 million in . Although current regulations require exchanges to keep client assets in offline cold storage, these precautions have not been enough to avert significant losses. After the DMM hack, the platform to compensate affected users, leaving many waiting for months.

Japan Sets Out to Rebuild Investor Confidence in Crypto Following Significant Security Breaches image 0
With the upcoming regulations, crypto exchanges will need to allocate reserves based on their transaction volumes and past security breaches. between ¥2 billion and ¥40 billion ($12.7 million to $255 million), and similar standards are anticipated for digital asset platforms. To help mitigate financial strain, through insurance coverage, a measure experts believe will support smaller firms in staying competitive.

The regulatory update will also introduce procedures to simplify the process of returning assets in the event of bankruptcy. Exchanges must keep customer funds separate from company assets, and

to distribute funds to clients if an exchange fails. This brings Japan’s rules in line with international standards, such as those in the European Union, under the Markets in Crypto-Assets (MiCA) regulations.

In addition to liability reserves, the FSA is rethinking Japan’s overall approach to crypto oversight.

under the Financial Instruments and Exchange Act instead of the Payment Services Act, which would treat them as securities. This change could pave the way for crypto investment products and harmonize tax rules with those for traditional assets. Other initiatives include supported by leading banks, and intensifying efforts to combat insider trading in the digital asset space.

Industry observers have praised these reforms as a positive step toward stabilizing a sector still recovering from the 2014 Mt. Gox collapse. Musheer Ahmed, founder of Finstep Asia,

, helping to rebuild trust but potentially increasing operational expenses for exchanges. At the same time, Japanese asset managers are gearing up to introduce the nation’s first crypto-focused investment trusts, .

The FSA’s planned changes aim to strike a balance between safeguarding investors and encouraging innovation in a market that now boasts over 12 million accounts

. As the 2026 legislative session nears, the ultimate form of these reserve rules—and their effects on Japan’s crypto landscape—will hinge on how well regulators can blend security with growth.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like

X’s Drive for Openness Reveals Overseas Interference, Ignites Discussion on Privacy

- X's new transparency feature exposing overseas locations of pro-Trump accounts sparked backlash, revealing accounts from Nigeria, Bangladesh, and Eastern Europe. - High-profile accounts like "@BarronTNews_" and "MAGA NATION" flagged as foreign raised concerns about foreign influence in U.S. politics and disinformation campaigns. - Privacy critics called the update an "invasion of privacy," while X's product head acknowledged accuracy issues and plans to address proxy/VNP loopholes. - Political reactions

Bitget-RWA2025/11/25 21:30
X’s Drive for Openness Reveals Overseas Interference, Ignites Discussion on Privacy

Investors Steer Through Crypto’s Unsteady Recovery as Wider Markets Remain Volatile

- Shiba Inu (SHIB) shows tentative stabilization amid crypto market fragility, with technical indicators suggesting potential consolidation for long-term holders. - Mutuum Finance (MUTM) completes 90% presale and initiates Halborn Security audit, advancing its dual-structured DeFi lending model for stable and volatile assets. - Traditional markets see Brainbees' $21.56M DF Pharmacy acquisition and BR Partners' 13.9% dividend yield, while energy prices hit one-month lows amid geopolitical uncertainty. - U.S

Bitget-RWA2025/11/25 21:30
Investors Steer Through Crypto’s Unsteady Recovery as Wider Markets Remain Volatile

Senator’s $5 Million Tax Settlement Reveals 16 Years of Financial Decline

- U.S. Sen. Jim Justice (R-W.Va.) agreed to pay $5.16M in overdue federal taxes, resolving a 16-year IRS dispute. - The settlement includes penalties and follows repeated legal actions over unpaid taxes dating to 2009. - Justice's financial struggles include liens on his Greenbrier Resort and ongoing disputes over real estate and coal mine debts. - The case highlights his public accountability challenges as a once-wealthy political figure facing persistent litigation.

Bitget-RWA2025/11/25 21:30

XRP News Today: Institutional Investors Move Funds to XRP While BTC and ETH ETFs See Massive Outflows

- XRP defies crypto market slump as BTC/ETH ETFs lose $1.6B, surging above $2.00 amid institutional inflows. - New XRP ETFs attract $22M+ in debut, driven by Ripple's DeFi utility expansion and proposed native staking. - Third-party staking platforms and DeFi projects like Doppler/Flare diversify XRP's use cases beyond payments. - Technical indicators show $3.6B futures open interest but caution persists over MACD bearish signals and $2.00 support. - Ripple's legal victories and ETF approvals position XRP

Bitget-RWA2025/11/25 21:30
XRP News Today: Institutional Investors Move Funds to XRP While BTC and ETH ETFs See Massive Outflows