KuCoin Receives Warning from Japan's FSA Over Unregistered OTC Derivatives Operations
Japan's financial regulatory authority has issued warnings to four cryptocurrency platforms, including KuCoin, as part of broader efforts to transition digital asset oversight to a new regulatory framework.
The Financial Services Agency (FSA), which serves as Japan's primary regulatory body for overseeing cryptocurrency exchange activities, has sent formal warning notices to several companies, including KuCoin, for engaging in specific business activities without obtaining proper registration, based on information released by the agency on Thursday.
The FSA's most recent compilation of organizations "conducting financial instruments business without registration" indicates that KuCoin, NeonFX, theoption, and GTCFX were all issued warnings in March for "soliciting over-the-counter (OTC) derivatives trading via the internet." Among these four entities, KuCoin—which maintains its headquarters in the Seychelles—was specifically identified as providing services directly to residents of Japan, whereas the remaining platforms cater to an international clientele.
This is not the first time KuCoin has received such a warning from Japanese authorities. The FSA previously issued comparable warnings to KuCoin alongside other cryptocurrency exchanges, notably Bybit, back in November 2024 for providing products and services to individuals residing in Japan without securing appropriate registration. Subsequently, in February 2025, the regulatory agency submitted formal requests to both Apple and Google requesting that the technology giants halt downloads of the KuCoin application.
The Japanese market represents a significant concentration of cryptocurrency adoption. According to data published by the FSA in February 2025, more than 12 million accounts existed within a total population of approximately 123 million people. Furthermore, Japan secured the 19th position in Chainalysis's 2025 Global Crypto Adoption Index.
Cointelegraph reached out to KuCoin for comment, but had not received a response at the time of publication.
The warning issued by the FSA arrives at a time when the regulatory body is working to transition Japan's existing legal framework away from the country's Payment Services Act toward the Financial Instruments and Exchange Act. This regulatory shift is expected to substantially modify reporting obligations for initial exchange offerings and entities issuing tokens, while simultaneously granting regulators enhanced enforcement capabilities over platforms operating without registration.
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