Crypto Exchange Requirements in Japan: What You Need to Know in 2025

When you trade crypto in Japan, a country with some of the most detailed and enforced cryptocurrency regulations in the world. Also known as the Japanese Financial Services Agency (FSA) jurisdiction, it’s one of the few places where crypto exchanges aren’t just allowed—they’re tightly controlled. Unlike places where crypto exists in a legal gray zone, Japan requires every exchange to be officially licensed. That means if an exchange says it’s available in Japan but doesn’t have an FSA license, it’s not just risky—it’s illegal.

Getting that license isn’t easy. Exchanges must prove they have robust KYC (Know Your Customer), a system that verifies users’ identities using government-issued IDs and proof of address. Also known as identity verification, it’s not optional—it’s mandatory for every single user, even if they’re just trading small amounts. You can’t skip it. You can’t use a fake ID. You can’t use a VPN to hide your location. The FSA checks this. They audit logs. And if they find a single unverified account, the exchange loses its license. That’s why Japanese exchanges like bitFlyer and Coincheck have such strict sign-up flows—they have no choice.

Security is another big part of the rules. Exchanges must keep 95% or more of user funds in cold storage. They need regular third-party audits. They must have cybersecurity insurance. And they’re required to report any hack or breach within 24 hours. These aren’t suggestions—they’re legal obligations. That’s why you rarely hear about major crypto thefts from Japanese exchanges. The system forces them to be careful.

There’s also a strict ban on unregistered tokens. If a coin isn’t approved by the FSA, exchanges can’t list it. That’s why you won’t find obscure memecoins or shady DeFi tokens on Japanese platforms. It’s not about limiting choice—it’s about protecting users from scams. This is why Japanese traders often look elsewhere for high-risk assets. But if you’re trading Bitcoin, Ethereum, or any major coin on a Japanese exchange, you’re doing it under one of the safest regulatory frameworks in the world.

For users, this means less noise and more trust. You know your exchange is legit. You know your identity is protected. You know your funds are stored securely. But it also means less flexibility. If you want to trade a new altcoin that just launched, you’ll have to wait—sometimes months—for it to pass FSA review. That’s the trade-off.

Below, you’ll find real reviews and breakdowns of exchanges that operate in Japan, what they got right, what they missed, and how their compliance—or lack of it—affects your experience. Some are fully licensed. Others pretend to be. Some offer security you can count on. Others are barely hanging on. We’ll show you which ones actually meet Japan’s rules—and which ones are playing a dangerous game.