Japan FSA to Require Crypto Exchanges to Establish Reserve Funds for User Compensation After Hacks

COINOTAG News reports, citing Nikkei Asia, that the Japanese Financial Services Agency is preparing a rule requiring cryptocurrency exchanges to establish a dedicated reserve fund to compensate users in the event of a hack or other security vulnerabilities. The move signals a shift toward enhanced consumer protection and stricter risk management within Japan’s digital asset ecosystem. Under the proposed framework, exchanges would need to demonstrate credible funding mechanisms, robust governance, and transparent reporting to ensure timely restitution without undue disruption to market activity. Industry participants and compliance teams are closely watching the regulatory development, which could set a precedent for resilience standards across regional markets and influence governance expectations for other jurisdictions.