The post Japan demands mandatory reserves after $21mln SBI hack – What it means appeared on BitcoinEthereumNews.com.

Key Takeaways When will the proposal be submitted? The legislation is expected to be submitted to parliament in 2026. Don’t exchanges already protect customer funds? They must store most customer assets in cold wallets, but they are not required to keep financial reserves to cover losses, something the new rules aim to fix. Japan is stepping up efforts to protect its growing base of crypto investors. Japan’s new crypto rules The country’s Financial Services Agency (FSA) is preparing to submit new rules that would require crypto exchanges to maintain liability reserves, a safeguard designed to compensate users in case of hacks or security breaches. Japan’s crypto rules already require exchanges to keep most customer assets in cold wallets, a practice meant to reduce exposure to online attacks. But even with these custody safeguards, platforms currently have no obligation to maintain dedicated reserves for potential losses, which leaves users vulnerable if an exchange suffers a breach or operational failure. To bridge this gap, the FSA plans to submit the legislation to the parliament in 2026, signaling an effort to bring crypto oversight closer to the rules that already apply to traditional markets, according to a recent Nikkei report. How will it help Japan’s crypto ecosystem? Under the current framework for traditional securities, brokers must hold financial reserves to cover losses from unfair practices. These practices include system errors or erroneous orders that can lead to significant financial damage. Major securities firms in the country typically maintain reserves ranging from ¥2 billion to ¥40 billion. This amount, roughly $12.7 million to $255 million, depends on trading activity and overall risk exposure. The FSA plans to establish new reserve requirements based on existing standards for traditional securities. They will also consider past crypto leak cases. Exchanges may have the option to use insurance…

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Filed under: News - @ November 25, 2025 8:28 pm