Japan’s Financial Services Agency (FSA) has issued warnings to five overseas cryptocurrency exchanges, including Bybit Fintech Limited, KuCoin, MEXC Global, Bitget Limited, and Bitcastle LLC. These exchanges are accused of operating in Japan without proper registration, violating the country’s cryptocurrency regulations. Japan FSA Issues Warning To KuCoin, Bybit, and Others for Violating Crypto Laws According to a CoinPost report , Japan’s FSA has flagged five crypto exchanges for providing services to Japanese users without mandatory registration. The warned exchanges include KuCoin, Bybit, MEXC Global, Bitget, and Bitcastle. These platforms were engaging in crypto trading activities in Japan without authorization from the FSA or local financial bureaus. Operating without registration raises serious concerns regarding the oversight of these platforms. Japan’s legal framework for cryptocurrencies ensures that registered exchanges adhere to strict compliance measures designed to protect customers. The unregistered top crypto exchanges bypass regulations, exposing users to significant financial risks. Moreover, the FSA emphasized that unregistered exchanges lack regulatory supervision, making it difficult to manage operations responsibly. The absence of asset segregation poses a major issue, as platforms may mix customer funds with operational assets. Users of unregistered platforms are also deprived of legal protections provided under Japanese law. In disputes or unexpected situations, such as insolvency or security breaches, customers are left without avenues for compensation. The lack of regulatory compliance leaves them vulnerable to potential losses. Japan’s Legal Framework for Cryptocurrency Exchanges Under Japanese law, any company offering cryptocurrency trading services must complete registration with the Japan FSA or a local financial bureau. This requirement ensures that the platforms operate within a robust regulatory structure. Registered exchanges must implement stringent safeguards for asset management and ensure transparent operations. The Japan FSA’s warnings remind users to verify crypto platforms’ compliance status. Japan takes strict action to uphold consumer protection and maintain market integrity. Additionally, this warning aligns with Japan’s broader strategy to tighten its grip on the cryptocurrency sector. According to a recent report, the government has restructured its Web3 leadership to enhance regulatory clarity and support innovation in digital assets. As Japan reclaims its leadership in the crypto and Web3 space, its regulatory approach will be critical to ensure user trust across the industry. With the increased global regulatory outlook, the UK’s Financial Conduct Authority (FCA) announced plans to finalize comprehensive crypto regulations by 2026. This move will align with global leaders like Hong Kong and Singapore, addressing trading platforms, crypto lending, and stablecoins. The post Japan FSA Issues Warning To Bybit And 4 Other Exchanges, Here’s Why appeared first on CoinGape .
