Japan to Inspect 32 Cryptocurrency Exchanges, 16 Still Under Review

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The Japanese financial authorities are stepping up oversight of the digital asset sector with a comprehensive inspection plan targeting 32 cryptocurrency exchanges. This initiative includes both licensed platforms and those still awaiting regulatory approval. The move comes amid growing concerns over cybersecurity, investor protection, and systemic risks in the rapidly evolving crypto market.

Regulatory Crackdown Following Major Security Breach

In early 2025, Japan’s Financial Services Agency (FSA) announced it would conduct thorough examinations of 32 cryptocurrency exchanges—16 of which are currently licensed and operating legally, while the remaining 16 are under active review for potential licensing.

This marks a significant shift in transparency, as the FSA had previously not disclosed the names of exchanges undergoing evaluation. The decision to release this information follows the high-profile hack of CoinCheck, one of Japan’s largest unlicensed exchanges at the time. In that incident, approximately 58 billion yen (over $500 million) worth of NEM tokens were stolen from user accounts.

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The breach exposed critical vulnerabilities in security protocols and risk management practices across the industry. In response, the FSA issued a business improvement order to CoinCheck, mandating a detailed report by February 13 outlining corrective measures and long-term safeguards.

Licensed Exchanges Under Increased Scrutiny

While licensed exchanges operate under stricter compliance requirements, they are not exempt from the current wave of inspections. The FSA aims to ensure that even approved platforms maintain robust systems for asset custody, transaction monitoring, and cyber defense.

Among the 16 licensed operators are well-established names such as:

These platforms were initially approved between September 2024 and December 2024, following rigorous assessments of their anti-money laundering (AML) frameworks, IT infrastructure, and corporate governance.

Unlicensed Platforms Now in Regulatory Spotlight

For the first time, the FSA has publicly identified the 16 exchanges currently under review. This unprecedented transparency is intended to enhance market accountability and inform users about the regulatory status of the platforms they use.

The list includes:

Notably, several of these platforms have already launched trading services despite lacking formal approval—a practice permitted under Japan’s transitional regulatory framework, provided they submit complete applications and cooperate with audits.

However, the FSA has made it clear that continued operation without final licensing could lead to shutdowns or legal action if compliance gaps persist.

Comprehensive Audit Framework: 43-Point Inspection Plan

To standardize oversight, the FSA has developed a detailed 43-item checklist that all 32 exchanges must address. According to reports from Jiji Press, this internal audit framework covers key areas such as:

Exchanges are required to submit comprehensive risk management reports detailing how they meet each criterion. Non-compliant platforms may face restrictions on new product launches, customer onboarding pauses, or even license revocation in severe cases.

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Why This Matters for Investors and the Global Crypto Market

Japan has long been at the forefront of cryptocurrency regulation, serving as a model for balanced oversight that supports innovation while protecting consumers. With over 260,000 users affected by the CoinCheck hack, public trust in digital asset platforms took a major hit—prompting regulators to act decisively.

The current inspection drive sends a strong message: transparency, security, and compliance are non-negotiable. For investors, knowing whether an exchange is licensed or under review can significantly influence where they choose to trade.

Moreover, this regulatory clarity may encourage more institutional participation in Japan’s crypto markets once confidence is restored.

Frequently Asked Questions (FAQ)

Q: How many cryptocurrency exchanges are currently licensed in Japan?
A: As of early 2025, there are 16 officially licensed cryptocurrency exchanges operating in Japan.

Q: Is CoinCheck a licensed exchange?
A: At the time of the hack, CoinCheck was not fully licensed but was operating under a provisional registration while its application was under review. It is now included in the list of 16 exchanges being evaluated for full approval.

Q: What happens if an exchange fails the FSA inspection?
A: Exchanges that fail to meet regulatory standards may receive business improvement orders, face operational restrictions, or have their applications denied. Repeat violations could result in forced closure.

Q: Can unlicensed exchanges legally operate in Japan?
A: Platforms that have submitted complete applications can continue operating during the review process under strict supervision. However, launching services without filing an application is illegal.

Q: How does Japan’s crypto regulation compare to other countries?
A: Japan was among the first nations to establish a formal licensing regime for crypto exchanges. Its approach emphasizes consumer protection, capital requirements, and cybersecurity—similar to frameworks emerging in Singapore and Switzerland.

Q: Where can I check if a crypto exchange is licensed in Japan?
A: The Financial Services Agency maintains an official list of registered virtual currency exchange operators on its website for public verification.

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Core Keywords

The ongoing inspections reflect Japan’s commitment to maintaining integrity in its digital finance ecosystem. As global regulators look to Japan as a benchmark, the outcomes of this review process could influence policy decisions far beyond its borders. For users, the priority remains clear: choose platforms that prioritize compliance, transparency, and security above all else.