Japan to Tighten Crypto Rules, Exchanges May Be Forced to Use Licensed Custodians
A major shift is coming for Japan‘s crypto industry, as regulators plan to force exchanges to use only licensed and registered third-party providers for asset custody. The Financial Services Agency (FSA) is mulling a new registration system to bring custodians and trading management firms under direct supervision.
This proposed rule would close a loophole in the current framework, which imposes strict cold wallet storage requirements on exchanges but leaves their external service providers largely unregulated. The change means that companies like Ginco—the firm implicated in the $312 million DMM Bitcoin hack—would need to seek official approval to continue operating.
The goal is to create a chain of regulated entities, ensuring that security standards are maintained at every level of the crypto ecosystem, not just at the exchange level.
