Japan Requires Crypto Platforms to Hold "Insurance" Reserves to Protect Investors from Potential Failures
- Japan's FSA mandates crypto exchanges to maintain liability reserves by 2026, protecting investors from losses via proportional funds and insurance options. - The rule follows major breaches like Mt. Gox and DMM Bitcoin , requiring reserves based on trading volume and risk profiles. - Regulators align crypto rules with traditional finance, expanding oversight to custodians and partners post-DMM hack. - Smaller exchanges may rely on insurance to ease liquidity pressures, though critics warn of increased c
Japan Introduces New Crypto Regulations With Liability Reserve Requirement
The Financial Services Agency (FSA) of Japan plans to introduce a groundbreaking rule that will require licensed cryptocurrency exchanges to set aside liability reserves. This initiative is designed to protect investors from potential losses caused by hacks, fraud, or operational mishaps. The proposal is expected to be presented to parliament during the 2026 regular session,
This regulatory overhaul is a response to two major incidents: the 2014 collapse of Mt. Gox, which lost 850,000 BTC, and
The liability reserve framework is modeled after protections in traditional finance, where Japanese securities companies are required to hold reserves between ¥2 billion and ¥40 billion ($12.7 million to $255 million), depending on their size
The 2026 legislative package will also redefine cryptocurrencies under the Financial Instruments and Exchange Act,
On the global stage, Japan’s regulatory stance is similar to the European Union’s MiCA rules and Hong Kong’s insurance-based compensation systems
Some critics argue that the increased compliance costs could be difficult for smaller exchanges, while supporters believe these measures will help rebuild user trust. “Liability reserves act as a safety net similar to bank account insurance,” said Musheer Ahmed, founder of Finstep Asia, though he noted that the capital requirements “will make running a crypto exchange comparatively more costly”
The FSA’s wider plan also includes
---
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.
You may also like
Trump’s ACA Subsidy Proposal Weighs Financial Relief Against Concerns Over Fraud in a Delicate Political Balance
- Trump proposes extending ACA subsidies for two years, raising eligibility to 700% FPL and ending zero-premium plans to combat fraud. - The plan faces bipartisan challenges, with Senate voting in mid-December and House Republicans favoring alternative cost-cutting measures. - Analysts warn premium hikes could destabilize ACA markets, risking coverage for 22 million Americans amid partisan gridlock.
Thiel Turns to Major Defensive Tech Firms Amid Growing Concerns Over AI Bubble
- Peter Thiel's Q3 2025 portfolio reshuffling saw full exit from Nvidia and reduced Tesla holdings , shifting funds to Apple and Microsoft amid AI valuation concerns. - The $166M from sales was partially reinvested into Apple and Microsoft, leaving over $120M in cash reserves, signaling a defensive strategy shift. - Nvidia's 0.33% premarket dip and mixed market reactions highlight institutional sentiment shifts, with analysts debating Thiel's caution versus potential miscalculation. - Thiel's track record
Burnout Epidemic Pushes Companies to Address Wave of 'Revenge Resignations'
- 55% of U.S. workers report burnout, driving "revenge quitting" surge as 72% see reduced efficiency and 71% lower job performance. - Burnout disproportionately impacts Gen Z (66%) and remote workers (61%), linked to workload (50%) and poor team dynamics (50%). - Only 42% of burnt-out employees discuss struggles with managers, with half receiving no meaningful support, risking talent exodus. - Eagle Hill Consulting warns burnout threatens organizational stability, urging leaders to address root causes befo
Solana News Update: In 2025, Investors Focus on Diversifying Rather Than Speculating in Their Crypto Approaches
- Sygnum Bank's 2025 report reveals 57% of investors prioritize crypto for portfolio diversification, surpassing speculative gains as the top motive. - Crypto's low correlation with traditional assets drives its adoption as a strategic hedge against macroeconomic risks, with 70% seeking staking yield inclusion in ETFs. - High-net-worth investors allocate 10%-20% to crypto for wealth preservation, while 150+ U.S. crypto ETF applications highlight growing institutional demand. - Regulatory uncertainty (40% c
Trending news
MoreCrypto prices
More
