Japan Orders Apple, Google to Block Unregistered Crypto Exchanges

Japan's Financial Services Agency (FSA) has requested Apple and Google to block downloads of unregistered crypto exchange apps operating in the country, according to local reports on Feb. 7. This is the first time the Japanese regulator has made such a request.

The targeted exchanges include Bybit and MEXC Global, with three other overseas exchanges also identified but not yet publicly named. The FSA's action comes as a response to these exchanges allegedly continuing to allow users in Japan to access their platforms despite repeated warnings to cease operations targeting Japanese residents.

Japan's Payment Services Act requires crypto exchanges to register with the FSA to operate legally in the country, ensuring compliance with anti-money laundering (AML) and investor protection laws. The FSA has long been tightening regulations on crypto exchanges, requiring them to adhere to strict know-your-customer (KYC) and AML rules.

The FSA's request highlights Japan's commitment to enforcing compliance within its crypto sector. The agency maintains one of the world's most rigorous regulatory frameworks for cryptocurrency, implemented following the high-profile Mt. Gox and Coincheck hacks, which resulted in billions of yen in customer losses.

Registered exchanges in Japan must store customer funds separately from company assets, maintain high-security standards, and comply with periodic audits conducted by the FSA. The FSA's request also raises questions about how major tech companies like Apple and Google enforce regulatory demands from governments.

Industry analysts suggest that the move could pressure unregistered exchanges to seek compliance or entirely exit the Japanese market. This action underscores Japan's determination to protect its citizens and maintain a robust regulatory environment for the crypto sector.