Japan’s Financial Services Agency (FSA) is moving to close regulatory gaps exposed by the 2024 DMM Bitcoin hack, which saw ¥48.2 billion ($312M) stolen.
The regulator has proposed new rules requiring all third-party crypto custody and trading management providers to register before servicing exchanges.
Under the plan, exchanges will only be allowed to use systems developed by registered entities—a move aimed at strengthening security after the breach was traced to Tokyo software firm Ginco. The proposal gained broad support within the Financial System Council and could be submitted to parliament by 2026.
The initiative aligns with Japan’s broader digital finance push, including a multi-bank stablecoin pilot by MUFG, Mizuho, and SMBC, and the recent approval of the country’s first yen-backed stablecoin, JPYC. Together, these moves highlight Japan’s twin focus on innovation and investor protection.
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