Financial Services Agency to Mandate Reserve Funds for Cryptocurrency Exchanges

The Financial Services Agency has announced that cryptocurrency exchanges will be mandated to set up reserve funds to prepare for incidents such as unauthorized outflows, as reported by Nikkei on the 24th. The purpose of mandating the accumulation of reserve funds is to swiftly compensate customers in the event of such incidents. This move comes amidst ongoing discussions on applying the Financial Instruments and Exchange Act (FIEA) to cryptocurrencies, aimed at enhancing investor protection. Furthermore, the Financial Services Agency intends to alleviate the burden on exchanges by allowing them to take out insurance to secure the funds necessary for compensation.