Japan’s financial watchdog flags KuCoin for OTC derivatives transactions
The crypto exchange has previously been in the crosshairs of Japanese regulators for offering products and services without the proper registration.
Update (March 27 at 2:25 pm UTC): This div has been updated to include a statement from KuCoin.
Japan’s watchdog for cryptocurrency exchanges issued warning letters to several companies, including KuCoin, for conducting operations without registering, according to a Thursday update from the Financial Services Agency (FSA).
According to the agency’s latest list of entities “conducting financial instruments business without registration,” the FSA said platforms KuCoin, NeonFX, theoption, and GTCFX received March notices for “soliciting over-the-counter (OTC) derivatives trading via the internet.” Of the four platforms, the FSA listed KuCoin, which is headquartered in the Seychelles, as offering services to Japanese residents, while the others have an international user base.
The FSA issued a similar warning to KuCoin and other exchanges, including Bybit, in November 2024 for offering products and services to Japanese residents without proper registration. In February 2025, the financial watchdog sent requests to Apple and Google for the companies to suspend downloads of KuCoin’s app.
Japan has a high concentration of crypto users. The FSA reported in February 2025 that there were more than 12 million accounts among a population of about 123 million. The country ranked 19th in Chainalysis’ 2025 Global Crypto Adoption Index.
In response to the FSA notice, a KuCoin spokesperson told Cointelegraph that the warning did not affect the exchange’s “broader global operations” and it took “regulatory compliance seriously.”
“KuCoin is not currently registered with the Financial Services Agency of Japan and does not operate a licensed entity in Japan,” said the spokesperson. “We respect Japan’s regulatory framework and will continue to assess and refine relevant arrangements in accordance with applicable laws and regulations, while maintaining constructive communication with relevant parties where appropriate.”
Related: Austria’s regulator slaps new business ban on KuCoin’s EU exchange
The FSA’s notice comes as the financial watchdog prepares to shift Japan’s legal framework from the country’s Payment Services Act to the Financial Instruments and Exchange Act. The change would significantly alter reporting requirements for initial exchange offerings and token issuers, and provide regulators with greater enforcement authority over unregistered platforms.
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