Japan’s financial authorities have intensified their crypto regulation oversight of the crypto sector by taking action against unregistered exchanges, reinforcing the country’s strong regulatory stance on digital assets.
Apple Removes Unregistered Crypto Exchange Apps
On February 6, 2024, Apple complied with a request from Japan’s Financial Services Agency (FSA) by removing five unregistered crypto exchange apps from its App Store.
The affected platforms included Bybit, Bitget, MEXC, KuCoin, and Bitcastle. This action followed multiple cautions from the FSA, urging these platforms to either comply with local regulations or exit the market.
Furthermore, a Nikkei report on February 7 revealed that the FSA formally requested Apple to restrict access to these apps for Japanese users. This then leads to their prompt removal.
Crypto Regulation Focuses on Investor Protection, Not a Ban
Unlike other countries where the removal of exchanges could signal a ban, Japan’s regulatory approach remains focused on investor protection.
The FSA has clarified that its measures are not aimed at restricting crypto investments but are designed to enforce transparent regulations that protect investors.
The authority has consistently reiterated that all crypto exchanges operating in Japan must adhere to the country’s legal framework.
In November 2024, reports revealed that the five exchanges had been operating in Japan without the necessary registration and lacked the FSA or any local financial bureau authorization.
In other words, they were providing services to Japanese users without regulatory approval, placing investors at potential risk.
Why Stricter Crypto Rules?
It is worth noting that while opinions vary on the reasons behind Japan’s stricter measures, one key factor is the recent classification of digital assets to be treated similarly to traditional financial assets.
Essentially, this signals Japan’s commitment to the long-term integration of crypto rather than its exclusion.
However, some reports suggest that even though these exchanges were removed from the App Store, users who downloaded the apps can continue using them without significant issues.
This is because the removal only affects future downloads, and Apple and Google cannot remove apps already on users’ devices.
Meanwhile, last year, Japan’s FSA proposed tax reforms in response to growing demands from the crypto industry for a more favorable tax environment.
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