Despite the global coronavirus pandemic, Japan's top financial regulator, the Financial Services Agency (FSA), continues to approve cryptocurrency exchanges to legally operate in the country. On March 30, 2020, the FSA registered Okcoin Japan, the Japanese subsidiary of Ok Group, as the 23rd licensed crypto exchange operator in Japan. This latest approval underscores Japan's unwavering commitment to regulating the digital asset industry even under extraordinary circumstances.
Okcoin Japan: Newest Licensed Exchange
Okcoin Japan is based in Tokyo and was founded in September 2017. According to the FSA's website, the exchange has been approved to trade five cryptocurrencies: Bitcoin Cash (BCH), Bitcoin (BTC), Ethereum (ETH), Ethereum Classic (ETC), and Litecoin (LTC). The exchange is currently accepting pre-registrations for account opening and is expected to launch soon. Okcoin Japan is also a member of the Japan Virtual Currency Exchange Association (JVCEA), a self-regulatory organization (SRO) approved by the FSA. As a “Class 1” member, it must comply with the JVCEA’s self-regulatory guidelines, which include measures to protect customers and prevent money laundering.
History of Crypto Exchange Registration in Japan
Japan legalized cryptocurrencies as a means of payment under the amended Payment Services Act in April 2017, requiring all crypto exchange operators to register with the FSA. The agency began accepting applications in September 2017, initially approving 11 exchanges: Money Partners, Quoine, Bitflyer, Bitbank, SBI VC Trade, GMO Coin, Huobi Japan (formerly Bittrade), Btcbox, Bitpoint Japan, Fisco Cryptocurrency Exchange, and Tech Bureau. Tech Bureau was acquired by Fisco after suffering a hack in September 2018, but both platforms continue to operate independently and are listed separately on the FSA’s website.
On December 1, 2017, four more exchanges were registered: DMM Bitcoin, Taotao (formerly Bitarg), Bitgate, and Xtheta. Bitocean followed on December 26. However, due to the high-profile hack of Coincheck – one of Japan’s largest crypto exchanges at the time – no new registrations occurred in 2018. The FSA subsequently tightened oversight, conducted on-site inspections, and revised its approval process. Coincheck was later acquired by Monex Group and finally registered with the FSA on January 11, 2019. In 2019, five more exchanges received approval: Rakuten Wallet and Decurret (March 25), LVC (September 6, a subsidiary of Line Corp. that launched the Bitmax exchange), Lastroots (November 27), and Fxcoin (December 24). With Okcoin Japan’s addition, the total number of FSA-registered exchanges now stands at 23.
Robust Regulatory Framework
All 23 FSA-registered crypto exchanges are “Class 1” members of the JVCEA. The organization also has “Class 2” members, which include companies that are not yet licensed by the FSA, such as Coinbase, Payward Asia, and Wirex Japan. This two-tier structure allows the industry to grow while maintaining rigorous standards for fully licensed entities. The FSA continues to cooperate closely with the JVCEA, sharing information and ensuring that self-regulatory measures align with national objectives.
Japan’s approach to crypto regulation has been influential globally. By requiring exchange registration and enforcing strict security and anti-money laundering rules, the country has created a safer environment for investors. The approval of Okcoin Japan during a global pandemic signals that the FSA remains committed to fostering innovation while protecting consumers. As the crypto landscape evolves, Japan’s regulatory model will likely serve as a benchmark for other nations.
(This article is based on news reports from March 30, 2020.)