Japan's crypto exchanges have different rules than exchanges in other parts of the world.
Customer assets and company assets must be held separately, with holdings verified in annual audits.Investors can't trade at more than 2X margin on exchanges, which is vastly lower than elsewhere, the Japan Times95% of all customer funds must be held by the exchanges in cold wallets. That is, wallets not actively connected to the internet.
5% of customer funds can be made ready for withdrawal by holding them in hot wallets, but the exchange has to self-insure whatever is in hot wallets with its own funds in its own cold wallets. In other words, if there were a breach on the hot wallet, the exchange could cover it out of its own funds.“What’s brought about the latest scandal isn’t crypto technology itself,” Mamoru Yanase of Japan's Financial Services Agency The FSA is urging the rest of the world to match Japan's oversight.
"I think Coincheck was a big regulatory moment in Japan that didn't effect other countries as much," Kumar said.There's still some concerns about whether FTX Japan customers will get all their funds back, according to reporting fromThe other side:They make it more expensive to run an operation there than elsewhere, which might be why U.S. exchanges,
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