Japan’s Financial Regulator Moves to Toughen Cybersecurity for Crypto Exchanges

Key Takeaways

• Cybersecurity Under the Microscope: Japan’s regulator is responding to persistent global crypto exchange hacks with a draft policy focused on strengthening security practices.
• Less Checklists, More Execution: The proposal emphasizes steady implementation, industry cooperation, and public support rather than narrow technical prescriptions.
• Transparency With Guardrails: Submitted comments may be disclosed, subject to safeguards around anonymity, personal data, and competitive harm.

Deep Dive

This week, the Japanese Financial Services Agency published a draft policy aimed at strengthening cybersecurity measures for crypto-asset exchange service providers, opening the door for public feedback as authorities look to curb the steady drumbeat of crypto thefts and system breaches seen around the world.

The draft policy is rooted in a simple reality the agency does not shy away from. Cyberattacks targeting crypto exchanges, often resulting in the outflow of customer assets, have become a recurring global problem. Japan’s own Financial System Council has already warned that exchange operators need to keep raising the bar on security, not just meeting baseline expectations.

Rather than prescribing a rigid technical playbook, the FSA’s proposal focuses on how security efforts are organized and sustained. The policy is designed to push firms toward consistent, day-to-day implementation of cybersecurity measures, while also encouraging stronger cooperation across the crypto industry. Alongside those self-help and mutual assistance efforts, the regulator signals that public-sector support will play a role in reinforcing defenses where needed.

The agency says the goal is broader than compliance alone. By publishing the draft, it aims to create shared awareness among crypto exchanges, users, and related organizations about what effective cybersecurity should look like in practice and how responsibility is distributed across firms, the industry, and regulators.

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