Japan should be commended for the stance it has taken on the burgeoning cryptocurrency sector. In the crypto sector, the Asian country is known for two of the world’s biggest and infamous cryptocurrency exchange hacks – Mt. Gox lost $450 million in February 2014 while Coincheck lost nearly $530 million in January 2018 in separate data breaches. Despite these large-scale hacks, the country has taken a proactive approach to cryptocurrency regulation. This article takes a look at some of the top crypto exchanges in Japan.
Top crypto exchanges in Japan
In the wake of these catastrophic hacks, the country’s financial watchdog the Financial Services Agency (FSA) gave the cryptocurrency industry the right to police itself. The self-governing body, the Japan Virtual Currency Exchange Association (JVCEA) was tasked with the creation and enforcement of the industry’s own rules. The association formulates rules to protect consumers, curb money laundering, and draft operational standards for all crypto exchanges in Japan.
The top crypto exchanges in Japan are among the 17 exchanges approved by the FSA. This article gives you a breakdown of the exchanges but they are in not in any particular order.
Coincheck is an infamous exchange in Japan after it suffered a $530 million hack in 2018. The exchange was acquired by Monex Group a few months later and has managed to restructure itself.
Coincheck announced in January that it has been approved by the FSA to operate in the Asian country. The acquisition helped the exchange to make major improvements that include:
- Business strategy and organizational structure
- Customer protection
- Anti-financial crime measures – terrorism financing and anti-money laundering (AML)
The FSA states that the exchange deals with nine cryptocurrencies – BTC, BCH, ETC, ETH, FCT, LSK, LTC, XEM, and XRP.
The exchange announced in early April that it had launched Over-the-counter (OTC) services that initially supported BTC but has now extended its service offering to ETH and XRP.
Zaif is a Japanese cryptocurrency exchange owned by Tech Bureau, Corp. The exchange, which handles three digital currencies – Bitcoin (BTC), Bitcoin Cash (BCH), and Monacoin (MONA) – was positioned on number 35 on the list of the world’s biggest crypto exchanges by turnover as of September 2018.
The exchange joined the list of hacked of Japanese exchanges in September last year after it lost 6.7 billion Yen (nearly $60 million) through a security breach. Funds lost in the hack belonged to both the exchange and its clients.
Hackers siphoned funds from hot wallets that the exchange used for immediate transactions. The hack caused services to be suspended.
The exchange is easy to use and is intended for all types of investors. Zaif charges low trading fees.
Bitbank was established in 2014 and is considered to be one of Japan’s safest exchanges as it has never been hacked or associated with loss of funds. The exchange uses state of the art security features that include:
- 2-factor authentication
- Cold and hot wallets for storage
The exchange is a specialized platform as it offers support for BTC and LTC only. It also supports the Japanese Yen. Bitbank doubles up as a wallet service.
The platform’s fee structure favors traders as it charges for withdrawals only – about 0.0001 BTC or 0.001 LTC.
The exchange pros are:
- Low fees
- Easy to use
- Cold storage
- Market insights
The cons are:
- Supports only two digital assets as well as the Japanese Yen
Based in Tokyo, bitFlyer is one of the largest cryptocurrency exchanges in the world and the biggest in Japan as of June 2018.
With offices in three cities – Tokyo, Luxembourg, and San Francisco – the exchange was established in January 2014 by Yuzo Kano, an alumnus of the U.S. financial giant Goldman Sachs. The exchange temporarily ceased accepting new clients in June 2018 after the FSA sent the platform a business improvement order.
The exchange has also been approved to operate in 42 U.S. states. The exchange focuses on the Japanese market but due to low fees, it has garnered a large number of users from the international community.
bitFlyer offers sports and margin trading and due to its low liquidity, it may not be suitable for inexperienced traders.
The exchange offers the BitFlyer wallet and Trade Class accounts. The platform only supports Dogecoin, Litecoin, Monacoin, and Ripple while Ethereum is only reserved for Trade Class account.
BitFlyer fees vary depending on the actual service being used.
GMO Coin is a subsidiary of GMO Internet Inc., one of the largest IT companies in Japan. The internet company is highly involved in the crypto sector as it has three cryptocurrency exchanges (including GMO Coin) and several mining facilities.
The exchange was founded in 2016 and is compatible with both Android and iOS devices. The exchange allows users to trade in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).
BitOcean is a popular cryptocurrency exchange based in Tokyo. The exchange is approved by the FSA and manufactures Bitcoin ATMs.
BitOcean is free for all transactions and supports three languages, namely English, Chinese, and Japanese. It also works with several fiat currencies including the Japanese Yen.
The exchange was designed to match bank level hardware standards for efficiency and security. Transactions are processed as quickly as 15 seconds.
SBI Virtual Currencies
SBI Virtual Currencies is a subsidiary of the Japanese Strategic Innovator (SBI) Group. The exchange supports Bitcoin, Ripple (XRP), and Ethereum.
Foreign cryptocurrency exchanges
A number of foreign cryptocurrency exchanges allow Japanese residents to buy and sell virtual assets. Some of them are listed below:
Kraken is a U.S. based cryptocurrency exchange founded by Jesse Powell. The exchange was launched in September 2013 although developed had started nearly 2 years earlier. Powell began developing the exchange after visiting Mt. Gox offices in 2011. He claims that he wanted to build something that would fill the gap should Mt. Gox get hacked.
The exchange only supports bank deposits from Japanese customers. It is a trusted exchange with a good reputation in the industry and has good security ratings.
Kraken has deep liquidity and charges low fees.
The exchange has a difficult user-interface which makes it hard for first-time buyers. It is not private as it requires ID verification.
Established in December 2012, Bitfinex is peer-to-peer crypto exchange owned by Hong Kong-based iFinex Inc. The exchange lost customer funds totaling $400,000 in 2015 and $73 million in 2016 through hacks.
The exchange has been involved in controversies and reports have accused Bitfinex of price manipulation that led to Bitcoin’s bull run in late 2017. Bitfinex is also associated with the stablecoin Tether, which has had its fair share of scandals regarding its USD backing of tokens in circulation.
The exchange supports several altcoins and charges low fees for both low and large volume buyers.
Huobi Global was founded in 2013 in China by Leon Li but moved its headquarters to Singapore. The startup now has offices in Japan, Korea, and the U.S.
The exchange supports a number of cryptocurrencies that include Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, EOS, Cardano, Ethereum Classic, IOTA, DASH, NEO, and more.
Users of the platform can trade over 190 digital asset pairs and access customer service 24/7. The exchange charges competitive fees.