Japan Proposes Stricter Oversight for Crypto Management Providers
Japan's Financial Services Agency is advancing regulatory reforms targeting third-party vendors servicing cryptocurrency exchanges. The proposed rules would mandate prior notification or registration for firms offering trading systems or custody solutions—closing a loophole that currently allows such providers to operate without direct oversight.
The initiative, discussed at a November 7 working group meeting, aims to align external vendors with the stringent cold wallet storage requirements already imposed on exchanges. Regulators argue the MOVE will mitigate operational risks and clarify accountability chains when security incidents occur.
Industry participants largely endorsed a registration framework during deliberations, anticipating improved transparency and standardized security protocols. The finalized system is expected to incorporate cybersecurity audits, incident reporting mechanisms, and explicit liability provisions.
