Japan warns crypto firms like KuCoin over unregistered services while planning stricter rules to improve safety and transparency in digital asset markets.
Japan has taken strong action against unregistered crypto platforms as regulators increase oversight. However, the move comes as the use of crypto continues to increase across the country. According to an update from the Financial Services Agency, several firms have been served warning notices for being in business without the right to do so.
Japan Targets Unregistered Crypto Firms With Fresh Warnings
The regulator said on platforms including KuCoin, NeonFX, theoption, and GTCFX were contacted in March. These companies were accused of providing over-the-counter derivatives trading services online unregistered.
This means the platforms were enabling users in Japan to trade certain financial products without adhering to the laws in place. Therefore, the FSA issued warnings to stop these activities and protect investors. The agency frequently revises its list of companies that are operating without approval.
This isn’t the first time some such action has been taken. In November 2024, the FSA also fined KuCoin and Bybit for similar problems. Later in February 2025, the regulator requested Apple and Google not to allow KuCoin’s app to continue on their stores in Japan.
Japan is still one of the most active crypto markets in the world. The FSA showed that there were more than 12000000 crypto accounts in early 2025. With a population of around 123000000, this indicates the high interest of the public in digital assets.
At the same time, Japan’s position in terms of the percentage of the population knowing about and using cryptocurrencies is 19th place in the 2025 Global Crypto Adoption Index by Chainalysis. Therefore, regulators are trying to achieve a balance between innovation and investor protection.
New Rules Aim to Strengthen Market Safety
Along with warnings, Japan is planning to enforce stricter regulations on the crypto industry. One proposal calls for exchanges to hold liability reserves. This means that companies need to have additional funds to cover losses in case of hacks or failures.
Another rule is focused on custody services. Third-party companies that store or manage digital assets have to register with authorities now. This change is aimed at reducing gaps that were exposed following major incidents such as the DMM Bitcoin hack.
In addition, Japan is preparing to introduce a ban on insider trading in crypto markets by 2026. Under such rule, trading based on the non-public information will become illegal. The Securities and Exchange Surveillance Commission will have power to investigate and punish violators.
These measures reveal that Japan is taking a cautious approach to crypto regulation. On the one hand, the innovation in digital finance is supported by the country. On the other, it wants to ensure that the users are protected from fraud and misuse.
In conclusion, Japan’s recent warnings emphasize the need to comply with the laws of the country in the crypto industry. As more people adopt it, there are likely to be stricter rules governing the future of digital asset markets. Companies which work in Japan will have to conform absolutely, or will risk even more action from the regulators.