Japan's financial watchdog flags KuCoin for OTC derivatives transactions

Japan's Financial Services Agency (FSA) just dropped warning letters on KuCoin and three other platforms for running OTC derivatives trading without proper registration. The FSA's March notice targets KuCoin (based in Seychelles, serving Japanese residents), NeonFX, theoption, and GTCFX for 'soliciting over-the-counter (OTC) derivatives trading via the internet.' This isn't KuCoin's first rodeo—Japan's regulators have been on their case since at least November 2024 for unregistered services.

Back in February 2025, the FSA even asked Apple and Google to suspend KuCoin's app downloads in Japan. With over 12 million crypto accounts in a population of 123 million, Japan's a hotbed for crypto adoption—ranking 19th globally in Chainalysis's 2025 index. Cointelegraph hit up KuCoin for comment, but radio silence so far.

This crackdown comes as Japan's rewriting its crypto rulebook, shifting from the Payment Services Act to the Financial Instruments and Exchange Act. That move will tighten reporting for token issuers and give regulators more muscle to go after unregistered platforms.

In other Japan news, Prime Minister Sanae Takaichi (in office since October 2025) just denied any links to the 'Sanae token' memecoin, which briefly hit a $28 million market cap before crashing. The FSA's reportedly eyeing an investigation into that whole mess.