Japan’s New Crypto Law: Exchanges Required to Hold Liability Reserves for User Safety

The post Japan’s New Crypto Law: Exchanges Required to Hold Liability Reserves for User Safety appeared first on Coinpedia Fintech News

Japan is preparing to introduce one of its most important crypto rules to protect everyday crypto users from hacks, exchange failures, etc.

The country’s Financial Services Agency (FSA) is set to require all licensed crypto exchanges to maintain dedicated liability reserves, a safety buffer meant to protect customers if things go wrong, like the Mt. Gox collapse.

According to reports, the FSA will present a new bill to parliament in 2026 that would legally require exchanges to maintain sufficient capital to cover customer losses in the event of cyberattacks, fraud, or operational errors.

Japan already requires exchanges to store user assets in secure cold wallets, but until now, there has been no rule forcing companies to maintain reserves specifically for customer compensation. The upcoming mandate aims to close that gap and strengthen investor protection.

With the new reserve system, the mandate aims to close that gap and strengthen investor protection.

UPDATE