A pattern is becoming increasingly difficult to ignore. KuCoin, one of the world’s well-known crypto exchanges, is once again in trouble with Japanese authorities. This is the second time in less than a year that Japan’s top financial watchdog has formally warned the platform for not following the rules, and the pressure is only growing.
Japan’s Financial Services Agency (FSA) keeps the country’s financial markets safe and fair. This week, it has issued warning notices to KuCoin, along with three other crypto platforms—NeonFX, theoption, and GTCFX—for offering over-the-counter (OTC) trading in financial derivatives through their websites for Japan-based customers without the required government registration. Of the four, the FSA specifically flagged KuCoin. The exchange is headquartered in the Seychelles and holds no license to operate in Japan. The other three were noted mainly for their international user base.
All four platforms have since been added to the FSA’s public list of companies found to be “conducting financial instrument business without registration.” This process is one such way through which Japan puts such companies on notice and warns its citizens to steer clear of them.
A Familiar Target
This incident is not KuCoin’s first run-in with Japanese regulators. In November 2024, the FSA sent formal warning letters to five overseas crypto exchanges—KuCoin, Bybit, Bitget, MEXC Global, and Bitcastle—for operating crypto trading services in Japan without a license, in breach of the country’s Payment Services Act.
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What made those warnings particularly important was the FSA’s finding that several of these platforms were not operating in the Japanese market by accident. They were marketing their business well through Japanese-language websites, local customer support, and services built for Japanese users. They were doing all of this without a valid license.
Safety concerns featured heavily, too. The FSA noted that unregistered exchanges operate without proper oversight, making it nearly impossible to verify the correct handling of customer funds. The specific risk flagged was the potential for user money to be pooled with a platform’s own operating funds, leaving customers with little protection if things went wrong. For Japanese users on these platforms, there was no legal safety net.
In the months after the November warnings, access issues started cropping up for Japanese users. By February 2025, the FSA had formally requested that Apple and Google pull or block the apps of several unregistered exchanges—KuCoin, Bybit, Bitget, MEXC Global, and LBank—from Japanese app stores, making them unsearchable or unavailable for download in the country.
Japan’s push is not occurring without a reason. The country has a sizeable crypto industry, with on-chain activity picking up in 2025. Chainalysis data placed it among the top markets in the Asia-Pacific region for crypto adoption growth.
Bigger Changes Coming
The crackdown on unregistered platforms is running in parallel with a broader regulatory overhaul. Japan has been working towards a tighter legal framework for crypto. It wants stricter reporting requirements, a lot of supervision, and clearer obligations for exchanges and token issuers. The direction is clear: bring crypto oversight closer to the standards applied to traditional finance, and make it much harder for foreign platforms to serve Japanese users while sidestepping local rules.
The country is making things harder for prominent personalities in the country. Prime Minister Sanae Takaichi, who took office in October 2025, publicly distanced herself from a Solana-based meme coin called “Sanae token” (SANAE TOKEN) in early March 2026 after it briefly hit a market cap of around $27–28 million before collapsing. The FSA was reportedly watching the situation closely and weighing whether a formal investigation was warranted.
When all these factors are considered, the message becomes clear. Japan is serious about governing its crypto space, and neither foreign exchanges nor prominent political figures are getting any relaxation of the rules.
