Japan’s Financial Services Agency issues warnings to unregistered exchanges including KuCoin

Doohyun Hwang

Summary

Japan’s Financial Services Agency said it sent warning letters to four unregistered overseas platforms including KuCoin.
The FSA said it is also taking practical steps to block operations, including asking Apple and Google to halt downloads of the KuCoin app.
The FSA said it plans to move the legal basis for crypto regulation to the Financial Instruments and Exchange Act, strengthening reporting obligations and enforcement powers for token issuers and exchanges.

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Japan’s financial regulators have issued a wave of warnings to unregistered overseas crypto platforms, including KuCoin. The move aims to curb the business activities of unregistered operators and strengthen investor protection at home.

On the 26th (local time), Japan’s Financial Services Agency (FSA) said it sent warning letters to four firms—KuCoin, NeonFX, Doption, and GTCFX—alleging they conducted financial investment business without registration. According to the FSA, the firms are suspected of soliciting Japan-based residents online to trade over-the-counter (OTC) derivatives. KuCoin, headquartered in Seychelles, received a warning last November for the same reason.

The FSA is also pursuing practical measures to block operations. In February, it formally requested Apple and Google to halt downloads of the KuCoin app. The number of crypto asset accounts in Japan surpassed 12 million as of February. With a high user concentration relative to the total population, regulatory scrutiny has been intensifying year by year.

The FSA is also working to shift the legal basis for crypto asset regulation from the Payment Services Act to the Financial Instruments and Exchange Act. If the legislation is revised, reporting obligations for token issuers and exchanges would be strengthened, and regulators’ enforcement powers against unregistered platforms would be expanded.