FSA Japan Expands Unregistered Crypto Exchange Warning List
Japan's Financial Services Agency has refreshed its public register of entities that conducted crypto asset exchange business without holding the registration required by Japanese law. The September 2026 update adds at least one newly warned offshore operator to a cumulative list that now spans domestic and foreign entities warned as far back as 2018. For accounting firms, auditors, and corporate CFOs who rely on crypto accounting software to manage digital asset records, a transaction history touching any listed entity creates immediate AML, counterparty-risk, and disclosure obligations that cannot be deferred.
What the FSA Register Actually Is
Japan's Payment Services Act (Article 63-2) requires every entity that operates a crypto asset exchange business serving Japanese residents to register with the FSA or a relevant Local Finance Bureau. The agency's warning list names operators against which formal warning letters have been issued because they were confirmed, at the time of warning, to be running such a business without that registration.
Scope and limitations the FSA itself flags
The FSA is explicit about what the list does and does not mean. Inclusion confirms a violation was found at the point the warning letter was issued. It does not necessarily reflect the entity's current operating status, and the addresses and representative names shown may have since changed. Critically, the FSA also warns that entities not appearing on the list may still be operating unlawfully, so a clean search result is not a compliance safe harbour.
The list is split into two tables. One covers domestic (Japan-based) operators. The other, and by far the longer one, covers foreign-located operators, including some whose whereabouts are listed simply as "unknown." A 2020 amendment to the Payment Services Act also changed the official Japanese term from "virtual currency" to "crypto asset," so entries predating May 2020 still carry the older terminology.
The September 2026 Addition: Izakaya Limited
The most recent entry, dated September 2026, is Izakaya Limited, operating a platform called "IZAKA-YA." The entity lists a Hong Kong address and was warned for conducting internet-based crypto asset exchange business targeting Japanese residents without registration. The representative is recorded as unknown.
Pattern of offshore registration
Izakaya Limited follows a pattern visible across the broader list: offshore incorporation in a jurisdiction with lighter licensing requirements, internet delivery to Japanese users, and no FSA registration. Other entries on the foreign list show registrations in the Seychelles, St. Vincent and the Grenadines, Singapore, Dubai, and Gibraltar, alongside entities whose locations remain unverified. That geographic spread matters for firms conducting due diligence, because standard company-search tools in Japan will not surface these entities, and a reliance on local registry checks alone will miss them entirely.
Previously Warned Platforms on the Foreign List
The foreign-entity table includes several platforms that became globally significant after their FSA warnings were issued. The table below reproduces key entries directly from the FSA's published data.
| Entity / Platform | Listed Address | FSA Warning Date |
|---|---|---|
| Izakaya Limited ("IZAKA-YA") | Hong Kong (Mongkok) | September 2026 |
| KuCoin | Seychelles | November 2024 |
| bitcastle LLC ("bitcastle") | St. Vincent and the Grenadines | November 2024 |
| Bybit Fintech Limited ("Bybit") | Dubai | November 2024 |
| MEXC Global | Singapore | November 2024 |
| Bitget Limited ("Bitget") | Singapore | November 2024 |
| LBank Exchange | Unknown | June 2024 |
| Binance Holdings Limited ("Binance") | Unknown | June 2021 |
| Blockchain Laboratory Ltd | Macau | February 2018 |
Note that some entities appear more than once across different warning dates, reflecting repeat enforcement actions. Binance, for instance, received a warning in 2018 under a different listed address and again in 2021.
Domestic Operators on the Warning List
Three domestic entities appear in the Japan-based table. Two Tokyo-based companies, Bridge Investment Co. Ltd. and Cryptocurrency Worldwide Co. Ltd., were warned in April 2023 for conducting crypto exchange business through online seminars. Separately, an individual operator using SNS channels and a site called "CHIP SWAP" was warned in March 2022. All three cases involved transactions in or around a crypto asset that was then listed, or scheduled to be listed, on Japanese markets, adding a further layer of potential investor-protection concern beyond the bare licensing violation.
Why domestic cases carry different risks
Domestic unlicensed operators present a distinct risk profile compared with offshore ones. A Japanese-incorporated entity that solicits clients without registration may also have failed to implement the AML and know-your-customer controls that registered exchanges are required to maintain under the Act on Prevention of Transfer of Criminal Proceeds. That means transaction records from such a source may not meet the standard expected for a clean audit trail, regardless of how the counterparty is characterised in a client's books.
Compliance and Accounting Implications for Firms
The FSA register is not merely a consumer alert. For accounting firms, auditors, and corporate finance teams managing digital asset portfolios, it has concrete procedural consequences.
Counterparty due diligence and AML screening
Japan's Act on Prevention of Transfer of Criminal Proceeds requires obliged entities, including certain accounting professionals acting in a business capacity, to conduct customer due diligence and to monitor for suspicious transactions. A client who has traded through a listed unregistered exchange may have done so through a channel that lacked proper KYC controls at source. That gap does not automatically taint the client, but it does require the firm to assess whether the transaction history is adequately documented and whether a suspicious transaction report is warranted.
Firms that use digital asset accounting software to ingest exchange transaction histories should verify whether their import pipeline can flag transactions originating from addresses or exchange identifiers associated with unregistered operators. If the software does not support that level of screening, manual cross-referencing against the FSA list is the minimum acceptable standard.
Financial statement and disclosure considerations
Where a corporate client holds or has held crypto assets on an unregistered exchange, the auditor's assessment of asset recoverability becomes more complex. An unregistered operator has no FSA-mandated asset segregation obligation, no requirement to maintain the user-protection measures that registered exchanges must follow, and no formal supervisory relationship with the FSA. Assets held on such a platform may need to be assessed for impairment or disclosed as subject to heightened recovery risk in the notes to financial statements, depending on materiality.
For crypto bookkeeping software users in a corporate treasury context, the data sourced from an unregistered exchange is also less reliable from an audit-evidence perspective. Registered exchanges in Japan are required to provide verifiable transaction records; unregistered ones face no equivalent obligation, which means historical data may be incomplete, inconsistently formatted, or unverifiable through a third-party audit trail.
Ongoing monitoring, not a one-time check
Because the FSA updates the list periodically, and because an entity's status at the time of a warning may differ from its current status, a single compliance check at onboarding is not sufficient. Firms should build periodic re-screening of counterparty and client exchange lists into their AML programme cadence. The FSA's own caveat, that unlisted entities may also be operating unlawfully, means that high-risk indicators, such as an exchange with no verifiable regulatory registration anywhere, should trigger enhanced due diligence even in the absence of an explicit FSA warning letter.
For broader context on how Japan's financial regulators have approached crypto-linked enforcement actions, see Japan's earlier action against Garantex and the AML lessons it carries. For a wider view of how AML failures at major platforms cascade into firm-level risk, the analysis of how AML failures at major platforms cascade into firm-level risk is directly relevant.
Practical Steps for Accounting Firms and CFOs
The following steps reflect good practice given the current state of the FSA register. They are not exhaustive and should be adapted to each firm's specific obligations and client base.
Immediate actions
Cross-reference all current and recent client exchange counterparties against the FSA's published HTML, PDF, and Excel versions of the warning list. Document that review in the AML file with a date stamp. Where a match is found, escalate to the firm's Money Laundering Reporting Officer before proceeding with any further work on the relevant engagement.
For corporate clients with treasury crypto holdings, request a written confirmation of the exchange(s) used, verify registration status via the FSA's official register of licensed crypto asset exchange businesses, and note the outcome in the working papers. The FSA maintains a searchable database of licensed operators at its financial institution search portal, which is the authoritative source for registration status.
System and process updates
If your firm or your clients use crypto bookkeeping software that imports transaction data directly from exchanges via API, review whether the connection endpoint corresponds to a registered operator. An API connection to an unregistered exchange may still function technically, but the data it imports carries the provenance risk described above. Consider whether a disclaimer or disclosure note is needed in any report or set of accounts that relies on such data.
Update your AML risk assessment framework to include "use of unregistered crypto exchange" as a specific risk indicator, with a defined escalation path. Given that the FSA list covers entities across multiple jurisdictions, a client who trades internationally may have exchange relationships that are unregistered in Japan even if the exchange holds a licence elsewhere. Japanese law applies to services directed at Japanese residents regardless of where the operator is incorporated.
Frequently Asked Questions
Does appearing on the FSA warning list mean a platform is currently illegal to use?
The FSA is clear that the list reflects the status at the time the warning letter was issued, not necessarily the current situation. Some listed entities may have since obtained registration, ceased operations, or changed their structure. However, the appropriate response for a compliance-conscious firm is to treat any listed entity as requiring enhanced due diligence until its current registration status has been independently verified through the FSA's official licensed-operator register.
Can a Japanese company legally hold assets on an unregistered foreign exchange?
Japanese law prohibits crypto asset exchange business operators from serving Japanese residents without registration. The obligation falls on the operator, not the user. However, using an unregistered exchange does not insulate a corporate user from risk: asset segregation protections, dispute resolution mechanisms, and AML safeguards that registered operators must provide are absent, creating both financial and reputational exposure for the corporate user.
How often does the FSA update the warning list?
The domestic list was last updated in April 2023, according to the FSA's own notation. The foreign list was updated in September 2026. There is no fixed publication schedule; updates appear when the FSA issues new warning letters, so firms should check the page directly at regular intervals rather than relying on news coverage to signal an update.
What are the accounting implications if a client held assets on a now-listed exchange?
The auditor or accountant needs to assess asset recoverability, the reliability of transaction records as audit evidence, and whether any disclosure is required in the financial statements regarding the nature and risks of assets held on an unregistered platform. Depending on materiality and the specific circumstances, impairment testing or a note disclosure may be warranted. The lack of FSA-mandated asset segregation at unregistered operators is particularly relevant to recoverability assessments.
Is there a registration requirement for firms that simply hold crypto, rather than exchange it?
The Payment Services Act registration requirement applies to entities conducting crypto asset exchange business, meaning buying, selling, exchanging, or intermediating those activities for others. A company that simply holds crypto assets on its own balance sheet as a treasury asset is not operating an exchange business and does not require this registration. However, the firm custodying those assets on behalf of that company might, depending on the arrangement.