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Japan’s FSA is considering new rules requiring crypto custodians to register with authorities.
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Exchanges would only be allowed to use registered providers.
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The move follows the $312M DMM Bitcoin hack involving a third-party vendor.
Tightening Oversight on Crypto Custodians
Japan’s Financial Services Agency plans to introduce a registration system for companies providing crypto custody and trading management services. This would close a regulatory gap allowing unregistered third-party vendors to operate alongside licensed exchanges.
A Response to Past Security Failures
The move follows the 2024 DMM Bitcoin hack, where over 48 billion yen ($312 million) was stolen through a security breach linked to outsourced software provider Ginco. The incident exposed vulnerabilities in Japan’s crypto ecosystem.
Proposed Legislative Changes
The new framework would be integrated into the Financial Instruments and Exchange Act and is expected to reach Japan’s parliament during the 2026 ordinary Diet session. Most members of the FSA’s working group reportedly support the proposal.
Part of Japan’s Broader Crypto Strategy
Japan has recently accelerated stablecoin and blockchain initiatives, including the approval of the JPYC yen-pegged stablecoin and a major megabank-led pilot backed by the FSA.
