Japan is cracking down on the hidden weak links in its crypto ecosystem. In a direct response to the devastating $312 million DMM Bitcoin hack, the Financial Services Agency (FSA) is preparing new rules that would, in effect, outlaw the use of unregistered third-party custody providers.
The proposed mandate would force all digital asset custodians and trading management services to undergo a formal registration process.
Exchanges would then be legally required to vet their partners and use only approved systems, shutting the door on unregulated entities whose security flaws have led to massive losses.
The move signals a new phase of regulatory maturity, aiming to extend the country’s renowned financial oversight to every company that touches user crypto assets.
