Japan Cracks Down on Unregistered Crypto Exchanges

Japan’s Financial Services Agency (FSA) has taken swift action against five unregistered cryptocurrency exchanges, prompting major shifts in the country’s approach to crypto regulation. Here’s what you need to know about the latest directive and how it impacts the crypto landscape in Japan.

In a recent development reported by Nikkei, the Japan Financial Services Agency (FSA) directed tech giants Apple and Google to suspend downloads of apps belonging to five unregistered cryptocurrency exchanges. The exchanges named in the directive include:

• KuCoin
• Bybit Fintech
• LBank Exchange
• MEXC Global
• Bitget

While these exchanges are headquartered across different regions globally, they had made their apps available for download within Japan. The FSA claims that these exchanges operate without proper registration in Japan, prompting the order to remove their apps from the Japanese versions of the Apple App Store and Google Play Store.

Apple Complies, But Google’s Action Remains Unclear

Apple wasted no time in complying with the FSA’s directive. As of February 6, the tech company had already removed the five cryptocurrency exchange apps from the Japanese App Store. However, there is still uncertainty about whether these apps remain available on the Google Play Store, as no official statement has clarified the status on Google’s end.

Japanese blockchain expert Anndy Lian weighed in on the situation, emphasizing that the FSA’s actions are not an attempt to suppress cryptocurrency trading but rather an effort to ensure crypto businesses comply with Japanese regulations. According to Lian, the goal is to maintain the integrity of the crypto market and protect consumers from potential risks.

This approach aims to prevent a repeat of the infamous 2014 Mt. Gox hack, one of the largest and most devastating hacks in cryptocurrency history, which resulted in losses of approximately $9.7 billion for over 127,000 investors. The FSA’s latest measures reflect Japan’s commitment to creating a safer crypto environment.

The Mt. Gox Legacy: Ensuring Compliance and Protecting Investors

Mt. Gox, the Tokyo-based exchange that fell victim to the 2014 hack, has been working on repaying its creditors. Recent developments show that Mt. Gox has transferred over 48,000 BTC to KuCoin for redistribution, with more than $2.4 billion in BTC moved to a new wallet in December 2024. These efforts have led to speculation that Mt. Gox intends to repay additional creditors in the near future.

Anndy Lian stated that crypto exchanges must meet the necessary compliance standards to continue serving Japanese users, reinforcing Japan’s determination to protect consumers and ensure market integrity.

Japan’s Growing Focus on Crypto Regulation

This crackdown on unregistered exchanges aligns with Japan’s broader approach to cryptocurrency regulation, particularly in the wake of the 2014 Mt. Gox hack. Japan has also announced its tax reforms for 2025, which will treat cryptocurrencies like traditional financial assets. These steps mark a cautious, yet forward-thinking strategy for handling crypto in the country.

Japan has also clarified that it will not follow the U.S. plan to create a Strategic Bitcoin Reserve (SBR), signaling its position on crypto as a reserve asset. This decision reflects Japan’s cautious and calculated stance towards cryptocurrencies, prioritizing consumer protection and market integrity.

What’s Next for Crypto in Japan?

As Japan continues to enforce regulations on cryptocurrency exchanges, the country is making it clear that compliance is essential for foreign platforms wishing to operate within its borders. Moving forward, all exchanges must meet the regulatory requirements to ensure the safety and trust of Japanese crypto users.

This move by the FSA is a clear indication that Japan will not allow unregistered crypto exchanges to operate unchecked and that businesses must comply with the country’s laws to thrive in the market.