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FSA Asked Apple, Google to Remove Illegal Crypto Exchange Apps; Effort to Protect Traders, Prevent Money Laundering

Yomiuri Shimbun file photo
The Financial Services Agency is seen in Chiyoda Ward, Tokyo, in November 2020

The Yomiuri Shimbun

13:27 JST, February 8, 2025

The Financial Service Agency (FSA) requested Apple and Google to remove the apps of five illegal overseas crypto asset exchanges from their app stores this month, according to sources. The apps, which are designed for Japan, are not registered with the agency.

This is the first time the FSA has made such a request.

Apple Inc. has removed the apps from its App Store, while Google LLC has been rushing to respond.

As part of its efforts to protect users from losing money in the event of an exchange going bankrupt and to fight against money laundering, the FSA introduced a regulatory system in April 2017 that requires providers of crypto asset exchange services to register with the agency. Providing an unregistered exchange constitutes a violation of the Payment Services Law.

However, unregistered exchanges have been emerging one after another. In an attempt to lure customers looking to get rich quick, the exchanges have been engaged in such illegal acts as setting the leverage available to a customer to more than 100 times their deposit, far exceeding the legal limit of 2 times. Leverage refers to the ratio of a user’s deposited funds that can be traded on margin.

The FSA has sent a warning to 21 unregistered overseas exchanges requesting that they remove their Japanese-language websites. However, the websites displayed such statements as “All overseas exchanges have been given a warning, but this is just a formality.” The FSA, therefore, took the step of requesting Apple and Google to remove the apps of five noncompliant exchanges.

If an unregistered exchange goes bankrupt, users’ assets might not be protected. There have been reports of withdrawals being rejected and exorbitant withdrawal fees being charged.

There is also concern about the exchanges being used to launder money. A total of 19,344 crypto asset transactions were reported as suspected cases of money laundering and other misuse in 2023, a 170% increase from 7,096 cases in 2018, the National Police Agency said.