12-02-2025 
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Japan’s top financial sector regulator, the Financial Services Agency (FSA), is planning new rules that will require digital asset exchanges in the country to maintain liability reserves to protect customers against losses resulting from hacks and security breaches.
A report on November 24 from local outlet The Nikkei revealed that the FSA will submit legislation to parliament in 2026 that would require local digital asset exchanges—which currently do not have reserve requirements if they store customer funds in offline cold wallets—to set aside liability reserves to quickly compensate customers for losses resulting from “unauthorized outflows” of digital assets.
The specific reserve amounts are still under review, but the proposed new rules are reportedly expected to follow similar lines to those already in place for traditional securities firms, which are required to hold reserves ranging from ¥2 billion to ¥40 billion ($12.7 million to $255 million).
According to The Nikkei report, a working group of the Financial System Council (FSC)—an advisory body to the Prime Minister—has been examining the legal regulations for digital assets and will soon compile a report on their findings. The new liability reserve requirements will be a part of this report.
The proposed stricter rules appear designed to enhance consumer confidence in the digital asset space following a string of high-profile security breaches targeting Japanese exchanges, most notably the May 2024 hack of Japanese Bitcoin exchange DMM, which resulted in $305 million in losses.Japan was also the site of one of the most notorious crypto-sector scandals, the 2014 hack and subsequent collapse of the world’s largest BTC exchange at the time, Mt. Gox. The exchange went bankrupt in early 2014 after it lost 800,000 BTC to a hack. Since then, its creditors, who consist primarily of early Bitcoin investors, have been fighting to get their assets back—a fight that continues to this day.
Japan was also prominently featured in blockchain analytics firm Chainalysis’ recent mid-year update to its 2025 crypto crime statistics.
“So far in 2025, the U.S., Germany, Russia, Canada, Japan, Indonesia, and South Korea top the list of highest victim counts per country,” said Chainalysis, which placed Japan sixth in terms of most value stolen per victim.
The FSA and FSC presumably hope the incoming new liability reserves rules will provide a counterbalance to this worrying narrative in the minds of current and potential consumers.
In order to make the transition to the new framework more palatable for the exchanges in question, the FSA is also reportedly considering allowing them to purchase insurance rather than holding full cash reserves.
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