On-shore VASP in Japan

The FSA (with Local Finance Bureaus) registers and supervises crypto-asset exchange service providers (PSA Art. 63-2) and EPI exchange service providers (Art. 62-3), and drafted Law No. 64 of 2026, which moves crypto-asset trading to the FIEA; that law’s crypto provisions are not yet in force.

JVCEA is the certified association under PSA Art. 87, but membership is not mandatory: an applicant may instead adopt equivalent internal rules (PSA Art. 63-5(1)(vi)). New tokens require prior notification to the JVCEA, which may object (Rule on Handling of Crypto-Assets Art. 5); it also audits and sanctions members.

The Payment Services Act (Act No. 59 of 2009) crypto regime of registration, customer verification and asset segregation took effect in April 2017; a 2019 amendment in force May 2020 made changes to handled crypto-assets subject to prior notice, added advertising rules and required user crypto to be held in cold wallets in principle.

The 2019 FIEA and PSA amendment (in force May 2020) brought security tokens and crypto-asset derivatives under the FIEA; Law No. 64 of 2026, promulgated 23 Jul 2026, moves crypto-asset trading regulation from the PSA to the FIEA, but its crypto provisions take effect on a date set by cabinet order within one year of promulgation and are not yet in force.

Crypto-asset exchange service providers register under PSA Art. 63-2 with capital of at least ¥10 million and non-negative net assets (CAESP Ordinance Art. 9). Cold storage is mandatory except a 5% hot-wallet cap (Art. 27(2)). JVCEA membership is optional if equivalent internal rules are adopted (PSA Art. 63-5(1)(vi)); new tokens need prior notice to the JVCEA.

Custody of crypto-assets for others (PSA Art. 2(15)(iv)) is crypto-asset exchange business requiring Art. 63-2 registration. User money must be entrusted to a trust company (Art. 63-11(1)); user crypto must be segregated and held by the cold method, with hot-wallet holdings capped at 5% (CAESP Ordinance Art. 27), and segregation is audited by a CPA or audit firm (Art. 63-11(3)).

Crypto-asset exchange business requires Payment Services Act Art. 63-2 registration; individual margin must be at least 50% of the position, i.e. 2x maximum leverage (CAESP Ordinance Art. 25(5)(i)). Dealing in or intermediating stablecoins requires registration as an electronic payment instrument exchange service provider (PSA Arts. 2(10), 62-3); the FSA listed 2 as of 27 Aug 2026.

All crypto-asset exchange service providers (暗号資産交換業者, CAESPs) must be registered with the Prime Minister under Payment Services Act Art. 63-2; the PSA regime is a registration, not a licence, and the FSA register listed 27 registered providers as of 1 Sep 2026.

The Payment Services Act lets the regulator demand reports and inspect crypto-asset exchange service providers (Art. 63-15), issue business improvement orders (Art. 63-16), and revoke registration or suspend business for up to six months (Art. 63-17); e.g. the Kanto Local Finance Bureau ordered DMM Bitcoin on 26 Sep 2024 and CoinBest on 14 Jun 2024.

Crypto-asset exchange service providers must hold users' crypto-assets separately from their own so each user's holding is immediately identifiable (CAESP Ordinance Art. 27(1)), keep them in cold storage except a hot-wallet portion capped at 5%, and hold their own crypto of the same kind and amount against hot-wallet user crypto (PSA Art. 63-11-2).

Robust Security Measures: Strict requirements for cybersecurity, including multi-signature wallets, penetration testing, and internal audits.

Crypto-asset exchange service providers are specified business operators under the Act on Prevention of Transfer of Criminal Proceeds (Act No. 22 of 2007, Art. 2(2)(xxxii)); they must conduct customer verification (Art. 4), file suspicious transaction reports (Art. 8), and notify originator and beneficiary information to the receiving provider on customer crypto transfers to other providers (Art. 10-5).

Japan's crypto-asset travel rule, in force since 1 June 2023, is APTCP Article 10-5: a crypto-asset exchange service provider transferring crypto-assets at a customer's request to another provider must notify originator and beneficiary identification information; the article sets no monetary threshold, and the duty applies only to providers in jurisdictions with an equivalent rule — 58 jurisdictions, with Anguilla, Oman, Cuba, Dominica and Botswana being added in 2026.

Evidence fact jp.tax not found (may have been renamed).

Regulator: Financial Services Agency (FSA).