Japanese watchdog to require exchanges to hold liability reserves: Report
An advisory body to Japan’s FSA will reportedly release a report recommending crypto companies hold reserves to compensate users for events such as hacks.
The Financial Services Agency in Japan will reportedly require cryptocurrency exchanges to maintain liability reserves as part of measures to guard against hacks or unforeseen events.
According to a Monday Nikkei report, Japan’s FSA will revise its requirements for local companies to include methods for quickly compensating users affected by security breaches or other causes. The financial watchdog reportedly cited recent hacks of global exchanges as part of the reason behind the change.
The Financial System Council, an advisory body to the FSA, is reportedly set to release a report on the matter following a meeting on Wednesday. One of the expected recommendations would require crypto firms to create liability reserve funds.