Japan's Cryptocurrency Market Surge: 110 Exchanges Eye Entry Amid Tighter Regulation

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Japan’s cryptocurrency market is heating up, with growing global interest and tightening domestic regulations shaping the landscape. According to the country’s top financial watchdog, the Financial Services Agency (FSA), as many as 110 cryptocurrency exchanges have expressed interest in entering the Japanese market as of June 2025. This surge highlights Japan’s status as one of the most attractive yet strictly regulated crypto hubs in the world.

👉 Discover how Japan became a global hotspot for crypto innovation and compliance.

Regulatory Framework and Market Access

Under Japanese law, any company wishing to operate a cryptocurrency exchange must register with the FSA. As of now, only 19 exchanges are officially registered, with 16 approved in 2017 following the legalization of cryptocurrencies as legal payment methods in April of that year. No new approvals were granted in 2018 due to heightened scrutiny after the Coincheck hack, but three more—Coincheck, Rakuten Wallet, and Decurret—gained approval in early 2025.

The registration process includes rigorous compliance checks, on-site inspections, and adherence to strict anti-money laundering (AML) and know-your-customer (KYC) standards. Many of the 110 interested firms are currently in early stages such as preliminary consultations or formal inquiries about registration requirements.

One notable applicant is Line Corporation, Japan’s leading messaging platform, which operates a crypto exchange globally except in Japan due to regulatory barriers. Recent reports suggest its subsidiary may soon launch Bitmax, pending final FSA approval.

Key Registered Exchanges: A Timeline

2017 Approvals

Following the legalization of digital currencies, the FSA approved the first wave of exchanges:

Late 2017 Additions

In December 2017, five more joined:

This momentum halted in 2018 after the $530 million Coincheck hack, prompting the FSA to intensify oversight and conduct surprise audits across existing platforms.

Post-Hack Recovery and Compliance Upgrades

Coincheck’s Comeback

After losing approximately 650 billion yen (~$550 million) worth of NEM tokens in January 2018, Coincheck was acquired by Monex Group and underwent major security and compliance upgrades. It successfully re-registered with the FSA in January 2025 and now supports trading for 10 cryptocurrencies, including:

The platform continues restoring services paused post-breach, signaling a broader trend of institutional rehabilitation within Japan’s crypto space.

bitFlyer Resumes New Account Sign-Ups

bitFlyer, one of Japan’s largest exchanges by trading volume, had suspended new user registrations for over a year following an FSA business improvement order. In July 2025, it resumed account creation after enhancing its KYC and AML systems. The company stated:

"We voluntarily paused new account openings to reconfirm existing customer identities and strengthen internal controls. We are pleased to announce that new account creation has now resumed."

This marks a significant step toward restoring user trust and expanding market access.

Regulatory Enforcement: Fisco and Zaif Case

In June 2025, the FSA issued an administrative order against Fisco Cryptocurrency Exchange, which acquired the hacked Zaif exchange in late 2024. An on-site inspection revealed serious deficiencies:

"Management failed to recognize the importance of legal compliance… internal systems for risk management, outsourcing, and anti-money laundering were inadequate."

The FSA mandated Fisco to implement comprehensive reforms by July 22, including new compliance frameworks for data protection, external audits, and cryptocurrency handling.

This follows earlier sanctions against Zaif’s former operator, Tech Bureau, after it suffered a major breach in 2024.

Crackdown on Unauthorized Platforms

The FSA continues to warn against unlicensed operations targeting Japanese residents. In June 2025, it issued a public warning to Cielo EX Ltd., accusing it of offering BTC and ABX trading without authorization. This marks the fourth such warning since regulations took effect.

Previous targets include:

Binance founder Changpeng Zhao noted that the FSA’s warning came shortly after media reports highlighted regulatory concerns—underscoring the agency’s sensitivity to public perception and market integrity.

👉 See how global exchanges navigate Japan’s strict regulatory environment.

New Legislation Aligns with Global Standards

Japan has taken legislative steps to strengthen its regulatory framework. A revised bill passed in May 2025 amends two key laws:

The FSA outlined 15 guiding principles, including:

These measures aim to balance innovation with investor protection. Additionally, updated crypto business operation guidelines now cover:

The FSA confirmed it is undergoing internal restructuring to better manage the growing number of applications and enforcement actions.

Security Challenges Persist: BitPoint Japan Hack

Despite tighter rules, security remains a concern. In July 2025, BitPoint Japan, a licensed exchange, suffered a cyberattack resulting in losses of 3.5 billion yen (~$32 million) across multiple assets:

This marks the third major exchange hack in Japan within two years, following Coincheck and Zaif incidents. The breach is expected to trigger another round of regulatory tightening and mandatory security upgrades across all registered platforms.

Frequently Asked Questions (FAQ)

Q: How many cryptocurrency exchanges are currently licensed in Japan?
A: As of 2025, there are 19 officially registered cryptocurrency exchanges under the FSA.

Q: Why did no exchanges get approved in 2018?
A: Following the massive Coincheck hack, the FSA paused approvals to review and strengthen regulatory oversight, leading to stricter compliance requirements.

Q: What are the main requirements for exchange registration in Japan?
A: Exchanges must comply with AML/KYC rules, pass on-site inspections, maintain capital reserves, implement robust cybersecurity measures, and adhere to consumer protection standards.

Q: Is Binance allowed to operate in Japan?
A: No. Binance received an official warning from the FSA in 2024 for offering services to Japanese users without authorization.

Q: How does Japan regulate ICOs?
A: The updated guidelines clarify when token issuers can legally sell their tokens and require full disclosure to prevent fraud and market manipulation.

Q: What impact do hacks have on Japan’s crypto regulation?
A: Each major breach—such as those at Coincheck, Zaif, and BitPoint—has led to stronger regulations, including mandatory audits, improved custody solutions, and enhanced monitoring systems.

👉 Stay ahead of Japan’s evolving crypto regulations with real-time market insights.