Japan’s Financial Services Agency (FSA) is introducing new regulations that will require all cryptocurrency exchanges operating in the country to maintain liability reserves. This move is aimed at ensuring that users are properly compensated in the event of a hack or security breach.
According to a report by Nikkei, the FSA is tightening its rules following a number of high-profile security incidents that have affected user funds. Under the new policy, exchanges will need to set aside a portion of their assets to serve as an emergency fund, designed specifically to cover any losses suffered by users due to cyberattacks or technical failures.
Why This Move Matters
Japan has long been one of the most progressive countries when it comes to cryptocurrency regulation. However, this latest decision reflects a growing concern about user safety in a rapidly evolving digital asset environment. The new rules are expected to build trust and bring more accountability to the sector.
Crypto exchanges in Japan will likely need to adjust their internal systems to comply with these changes. This could include maintaining segregated accounts, improving cybersecurity infrastructure, and implementing stricter operational policies.
NEW: Japan's Financial Services Agency will require crypto exchanges to hold liability reserves to compensate users for hacks or security breaches, per Nikkei report. pic.twitter.com/vR1v18sifK
— Cointelegraph (@Cointelegraph) November 25, 2025
A Step Toward Global Standards
The Japanese government’s move aligns with a broader global trend of increasing oversight in the crypto space. Countries like the United States and the European Union have also started implementing more stringent measures for crypto platforms.
With liability reserves becoming a mandatory requirement, Japan is setting a strong example for how to balance innovation with consumer protection in the crypto industry.