How Overseas Crypto Exchanges Work for Japan Residents (and the Risks)

In Japan, the phrase "overseas exchange" (海外取引所) usually means a crypto-asset trading platform that is run from outside Japan and is not authorised by Japan's Financial Services Agency (FSA, 金融庁) to offer its services to people living in Japan. Understanding what that authorisation is — and what its absence means — is the key to reading this part of the market clearly.

The legal line: the Payment Services Act

Japan regulates crypto trading under the Payment Services Act (資金決済法). Any business that runs a crypto-asset exchange service (暗号資産交換業) for Japanese residents must be authorised by the FSA through a Local Finance Bureau (財務局). Article 63-2 (第63条の2) of that Act specifically prohibits soliciting Japanese residents without this authorisation. So in the Japanese legal context, an "overseas exchange" is typically a global platform that holds no Japanese authorisation and is therefore not permitted to actively market to residents.

This is not the same as saying the platform is unlawful everywhere — many are licensed in other jurisdictions. It means that, from the standpoint of Japanese law and Japanese user protections, the platform sits outside the domestic framework.

How they operate, mechanically

An overseas platform is usually reachable through a global website or app. Accounts are opened online, and funds are typically moved in and out using crypto transfers or cards rather than the domestic banking rails that authorised Japanese operators use. Because the platform is not authorised in Japan, it generally does not belong to the Japan Virtual and Crypto assets Exchange Association (JVCEA, 日本暗号資産取引業協会) — the accredited self-regulatory body — and it is not bound by the customer-protection rules that Japanese authorisation carries, such as the requirement to keep customer money and crypto separate from the company's own funds under Japanese oversight.

How to read the FSA's public warning mechanism

When the FSA identifies an operator soliciting Japanese residents without authorisation, it issues a public warning letter (警告書) and adds the operator to its public list, published as 「無登録で暗号資産交換業を行う者の名称等について」 on fsa.go.jp. Enforcement can escalate from there to formal requests that app stores remove the operator's apps.

The public record shows this mechanism in action. According to the FSA's published list, well-known overseas operators including Bybit, MEXC and Bitget have been named, and were re-listed across two waves — in March 2023 and again in November 2024. On 6 February 2025, at the FSA's request, Apple removed several of these apps (Bybit, Bitget, MEXC, KuCoin and LBank) from Japan's App Store — the first action of its kind. Bybit then began phasing out its services for Japan from December 2025.

One nuance is essential. The FSA states on the list itself that "even a party that is not listed may be conducting unauthorised exchange business" (掲載されていない者であっても、無登録交換業に該当する行為を行っていることがあり得ます). In other words, absence from the warning list is not a mark of approval or safety — it may simply mean an operator has not yet been publicly named.

The risks for Japanese residents

• No Payment Services Act protections. Without Japanese authorisation, there is no domestic requirement to segregate and safeguard customer assets, and no Japanese supervisor overseeing the platform.
• No JVCEA safeguards. The self-regulatory guardrails that apply to authorised operators — listing screening, advertising standards, asset-management guidance — do not apply.
• Difficulty recovering funds. If an overseas operator freezes withdrawals, fails, or exits the market, there is no Japanese authority to appeal to, and cross-border recovery is slow, costly, and often unsuccessful.
• Sudden loss of access. As the app-store removals and the Bybit Japan phase-out show, access can be curtailed with limited notice, which can strand users who still hold balances or open positions.
• Tax obligations do not disappear. Using an overseas venue does not change Japanese tax rules. Gains from crypto are still taxable, and residents remain responsible for declaring them (確定申告). Believing otherwise is a costly misunderstanding, not a strategy.

How to check before trusting any platform

The practical safeguard is to consult the FSA's own published lists — both its list of authorised operators and its public warning list — and to keep the FSA's caution in mind: an operator's absence from the warning list does not prove it is safe or authorised. When protections matter, the domestic, authorised route is the one built to provide them.

Summary

An "overseas exchange" in Japan is a platform that operates without FSA authorisation and therefore outside Japan's user-protection framework. The FSA's warning-letter and public-list mechanism — and its escalation to app-store removals, as seen across 2023–2025 — shows how that boundary is enforced. For a Japanese resident, the core takeaways are that these venues carry real, structural risks around fund safety and recovery, that sudden loss of access is a documented pattern, and that tax duties remain unchanged regardless of where trading happens.

This article is for educational and informational purposes only and does not constitute investment, financial, tax, or legal advice. Regulatory facts are current as of publication and may change; always verify the latest information directly with the FSA (金融庁) and official sources, and do your own research.