Japan’s FSA Pushes Stricter Crypto Rules

• Japan’s FSA says every crypto exchange has to hold cash reserves like stock brokers do.
• Big hacks like DMM and Bybit pushed this; they also want bulletproof bankruptcy rules.
• Might move BTC, ETH and tons of alts under the stricter investment law instead of the old payment rules.

Japan’s FSA is getting serious about protecting crypto users. They want every exchange to keep a pile of cash on hand. Just like securities firms do, so if a hack or a mistake happens, customers get paid quickly.

Think billions of yen, depending on the exchange size and past drama. Final numbers come in 2026, and smaller platforms might cover part of it with insurance instead.

Right now exchanges already stash most coins in cold wallets, but big hacks like DMM Bitcoin losing 48 billion yen last year and Bybit dropping $1.46 billion in February showed that’s not enough. The FSA also wants crystal clear rules for bankruptcies.

Customer funds stay completely separate, and an independent admin steps in to hand coins back if the company collapses, with no more Mt. Gox nightmares.

Bigger Picture

The agency is talking about moving Bitcoin, Ethereum, and over a hundred big coins from the Payment Services Act (where they’re seen as money) into the tougher Financial Products Transaction Act, same rules as stocks. That would mean stricter ads, clearer risk warnings, and heavier licenses for exchanges.

Japan was one of the first countries to legitimize crypto, but now regulators say the market is mostly trading and speculation, not payments. With Europe, Hong Kong, and others tightening up, Japan wants to stay safe while still letting the industry grow. Expect the new rules to hit the Diet in 2026.