Japan's financial regulator asks Apple, Google to block unregistered crypto exchanges: report

Japan’s financial regulator, the Financial Services Agency, has formally requested Apple and Google to block five unregistered overseas crypto exchanges on their respective app stores in the country for the first time, Nikkei reported.

The companies targeted are Bybit, MEXC Global, LBank Exchange, KuCoin and Bitget, according to the news outlet. The FSA issued a warning under the Payment Services Act and decided to make the names of the firms public.

Apple reportedly removed the apps in Japan on Thursday in response to the agency’s request, having repeatedly warned the companies not to offer services to Japanese citizens. Google is yet to respond to the request, Nikkei said.

However, any such block only prevents future downloads and Apple and Google are unable to remove apps that customers have already downloaded, meaning that their use may persist.

Unregistered crypto exchanges can often operate across borders without being subject to the regulations and oversight of individual countries. Japan issued its first warning to firms in 2018, but unregistered businesses continue to operate in the country.

"We are aware of the issue and sincerely apologize for any inconvenience caused by the temporary removal of the Bitget app from the iOS App Store in Japan," Bitget Chief Legal Officer Hon Ng told The Block. "We are actively working with Apple and relevant regulators to resolve this issue as soon as possible. All user funds are safe and secure whilst we resolve this matter. Bitget's operations are conducted appropriately and transparently, and we are constantly evolving to meet global compliance standards for crypto assets. We take compliance very seriously and remain committed to providing a secure and stable trading experience."

Bybit, MEXC Global, LBank Exchange and KuCoin did not respond to a request for comment from The Block.

Crypto in Japan

Japan has a relatively stricter attitude to the crypto industry than other jurisdictions, with its FSA encouraging financial institutions in the country to strengthen their monitoring of "unlawful" transfers to crypto exchange providers last year.

However, while South Korea leads the way in the Asia-Pacific region in terms of retail trading volumes, Japan has carved out a different niche in the crypto space — becoming a hotspot for enterprise participation, with major players like Nomura, SBI, SMBC, Sony and DMM making significant strides.

Japan’s three megabanks — MUFG, SMBC and Mizuho — are also trialing a cross-border stablecoin transfer platform, aiming to offer faster international settlement for enterprises.

Japan's web3 venture capital scene, on the other hand, is limited, with entrepreneurs struggling to raise significant funds, typically securing only $1 to $3 million, compared to the tens or sometimes hundreds of millions raised abroad.

Earlier this week, the Hong Kong-based OSL Group exclusively told The Block it had completed the acquisition of Japanese crypto exchange CoinBest, renaming it to OSL Japan, as the company eyes global expansion.

Updated with comment from Bitget.