Japanese regulator requires crypto exchanges to create a reserve fund
Date: 2025-11-26 Author: Oliver Abernathy Categories: IN WORLD
The Financial Services Agency of Japan (FSA) intends to require all cryptocurrency exchanges in the country to establish a special reserve fund. The primary purpose of this change is to compensate clients in the event of theft or unauthorized withdrawal of assets. This decision is due to the increasing number of incidents in the crypto space and the desire to improve investor safety.
According to the regulator, the fund will be used exclusively to promptly cover user losses in the event of force majeure. This approach will minimize financial risks and strengthen investor confidence in the platforms.
An advisory group to the Financial Services Council, chaired by the Prime Minister, is expected to prepare a report with recommendations for implementing these requirements soon. Following its publication, the agency will make a final decision on introducing new regulations.
In addition to the reserve fund, the regulator is considering strengthening oversight of exchange activities. If the relevant measures are adopted, platforms will face a ban on insider trading, expanded disclosure obligations, and strict checks on data storage methods. These steps should create a more transparent and secure environment for crypto market participants.
It was previously reported that Japan Exchange Group, the largest crypto exchange operator in Japan, is considering restricting the activities of publicly traded companies that actively accumulate cryptocurrency. Such measures will help reduce systemic risks and prevent individual players from gaining undue influence on the market.
Experts believe that the FSA's initiative will be an important step toward regulating the cryptocurrency industry in Japan. The creation of reserve funds and increased transparency of operations can increase investor confidence and stimulate market development, while reducing the likelihood of major losses from cyberattacks and fraud.
Thus, the Japanese regulator is emphasizing the protection of user interests and ensuring the stability of the crypto market. The creation of a mandatory reserve fund and increased oversight of exchanges demonstrate the country's serious approach to regulating digital assets and preventing financial risks. In the coming months, the market will closely monitor the FSA's specific steps and the platforms' responses to the new requirements.
