Japan Tightens Crypto Rules: Cash Reserves for Exchanges

Japan’s Financial Services Agency (FSA) is implementing stricter regulations on cryptocurrency exchanges, aiming to increase user protection and bolster stability within the market. The new rules mandate all exchanges hold cash reserves similar to those held by stock brokers. This measure was prompted by high-profile hacks like DMM and Bybit, which underscored the need for quick payouts in case of security breaches or errors. 2026 will see the finalization of cash reserve requirements based on exchange size and historical vulnerability.