Japan is preparing to require crypto exchanges to hold dedicated reserves against customer losses, in a fresh attempt to shield investors from hacks and operational failures in one of the world’s most heavily regulated digital asset markets.
The Financial Services Agency plans legal changes that would require exchanges to create liability reserves to compensate users if platforms are hacked or suffer other incidents that lead to lost funds, Nikkei reported Tuesday.
Japan already obliges exchanges to store customer coins primarily in cold wallets, which are kept offline and viewed as more secure. Under the current regime, however, platforms that follow these custody rules do not need to set aside specific reserves to cover potential losses, leaving customers exposed if a breach or failure does occur.
The FSA aims to submit a bill to parliament in 2026, extending a framework long used in traditional securities markets into crypto.
Major Japanese brokers currently hold reserves of about 2b to 40b yen, or roughly $12.7m to $255m, with amounts linked to trading volumes and other risk factors. Regulators plan to use those precedents, along with past crypto leak cases, to determine appropriate reserve levels for digital asset exchanges.
The new system would mirror the reserve requirements imposed on securities companies, which must provision funds to cover losses tied to illegal or unfair practices such as erroneous orders.
These episodes have revived concerns in Tokyo that even with cold storage, large platforms remain attractive targets.
The push comes after a series of high-profile incidents. In May 2024, DMM Bitcoin reported that about 48.2b yen worth of Bitcoin had been stolen. In Feb. 2025, global exchange Bybit disclosed that hackers had taken roughly $1.46b in cryptocurrency.
Recent Mega-Hacks Renew Pressure On Japan To Toughen Exchange Safeguards
