How to Choose a Cryptocurrency Exchange: Top 5 Recommended Platforms for International Users

Is Using Overseas Cryptocurrency Exchanges Illegal?

Many users in Japan have questions about the legality of using overseas cryptocurrency exchanges. In short, it is not illegal for Japanese residents to access overseas exchanges. Under current Japanese law, crypto asset exchange operators must register with the Financial Services Agency (FSA), but there are no regulatory restrictions imposed on users themselves.

However, it is important to recognize that using overseas exchanges not registered with the FSA involves certain risks regarding security and asset protection. For example, risks such as hacking or fraudulent cryptocurrencies—which are uncommon at registered domestic exchanges—may exist. Therefore, when choosing an overseas exchange, carefully review the platform’s operational status, security measures, and any history of incidents.

Legal Framework and User Position

Japan’s Payment Services Act requires that any crypto asset exchange operator obtain registration from the Prime Minister. This legal requirement targets operators, not users, and there are no legal restrictions on individuals using unregistered exchanges. In summary, operating an unregistered exchange is illegal, but individuals who use such services are not violating the law.

Still, there have been cases where overseas exchanges, after receiving FSA warnings, suspended services for Japanese users. These incidents can lead to misunderstandings that “overseas exchanges are illegal,” but it is vital to understand that there are no direct legal restrictions on users.

Security and Risk Management Essentials

Overseas exchanges that lack FSA registration may pose security risks. These can include asset losses from hacks, involvement with fraudulent projects, or abrupt service suspensions. When using overseas exchanges, consider the following points:

• Are security measures such as two-factor authentication and cold wallets implemented?
• Is there a history of security incidents or asset losses?
• Are third-party audits and proof of assets published?
• Is there a robust user support system?

Research these areas beforehand and use the platform at your own risk—this is fundamental to safely utilizing overseas exchanges.

Key Factors for Choosing a Cryptocurrency Exchange

Choosing a crypto exchange requires a comprehensive evaluation of several factors. This is especially true for overseas platforms, where the characteristics and risks differ from domestic exchanges. Here, we detail five essential points to focus on when selecting an exchange.

Strength of Security Systems

The most crucial aspect of any exchange is its security. In crypto trading, asset protection is paramount, so it is essential to verify what safeguards the exchange has in place. Pay special attention to the following security features:

• Two-factor authentication (2FA)
• SSL encryption for secure communications
• Asset storage in cold wallets
• Regular security audits
• Hacking insurance coverage

Other factors—like server reliability, incident history, and response capabilities—are also key. An exchange with robust security allows you to trade with confidence.

Token Variety and Diversity

The range of cryptocurrencies an exchange offers directly impacts your investment opportunities. While leading tokens like Bitcoin and Ethereum are available everywhere, altcoins and new project tokens vary widely by platform.

Most overseas exchanges list far more tokens than domestic ones. Some major global platforms offer hundreds or even thousands of cryptocurrencies, giving investors a wide array of choices. However, a large token selection is not always a pure advantage—low-liquidity or scam projects may be included, so do thorough research before investing.

Fee Structure: Comparison and Optimization

To manage trading costs, it is essential to compare fee structures. Crypto exchange fees typically include:

• Trading fees (maker/taker)
• Spreads (price differences in brokerage models)
• Deposit/withdrawal fees
• Transfer fees

For active traders, small differences in trading fees can add up over time. Choosing platforms with tight spreads can also lower your effective trading costs. Compare multiple exchanges and choose one with a fee structure that matches your trading style.

Ease of Use and Platform Functionality

The usability of trading tools has a major impact on efficiency and outcomes. For beginners, platforms with intuitive interfaces are ideal. Evaluate the following:

• Website and mobile app usability
• Advanced charting tools
• Diverse order types (market, limit, stop orders, etc.)
• Availability of Japanese language support
• Quality and speed of customer support

If you need advanced features (leverage, futures, options), make sure the exchange provides them.

Reliability and Transparency

Reliability and transparency are especially important when considering overseas exchanges. Review these aspects to ensure a secure trading environment:

• Third-party audit reports
• Proof of reserves published
• Asset verification using Merkle trees
• Any history of security incidents or asset losses
• Compliance status in relevant jurisdictions

Exchanges that proactively publish due diligence findings and Merkle tree records tend to be more transparent and trustworthy. Due diligence involves third-party risk assessments, providing investors with critical risk insights. Merkle tree structures—core to blockchain—ensure hierarchical, tamper-resistant transaction and asset records.

Pros and Cons of Overseas Cryptocurrency Exchanges

Overseas exchanges offer unique benefits not found domestically but also come with distinct risks. Below, we break down the main pros and cons of using overseas platforms.

Key Benefits of Overseas Exchanges

Extensive Token Offerings

The greatest appeal of overseas exchanges is the sheer variety of tokens available. Some major platforms list hundreds or even thousands of cryptocurrencies, vastly outpacing domestic exchanges. This brings several investor advantages:

• Early access to new projects
• Opportunities to invest in minor altcoins
• Enhanced portfolio diversification

Still, a large token listing can also include illiquid or fraudulent assets, so careful research is essential.

Low Spreads and Competitive Fees

Overseas platforms often maintain narrow spreads (the buy/sell price gap), benefiting frequent traders with lower transaction costs. The smaller the spread, the lower the effective cost, making these platforms especially attractive for active investors.

Trading fees are also typically lower than domestic exchanges, reducing long-term costs. However, fee structures vary by platform, so compare multiple options to find the best fit for your trading approach.

High-Leverage Trading Access

Overseas exchanges offer far higher leverage than domestic regulation allows (domestic cap: 2x). Some platforms provide leverage above 100x, enabling large positions with modest capital.

Many overseas exchanges use zero-cut systems—automatically liquidating positions before losses exceed your margin—to prevent debt beyond your original deposit. This adds a layer of safety. However, high leverage carries high risk and requires careful management.

Key Drawbacks of Overseas Exchanges

Language and Support Challenges

Some overseas platforms offer customer support exclusively in English. While this may not affect everyday trading, it can create barriers during troubleshooting or emergencies. Translation tools may help, but urgent support may be delayed.

JPY Deposits and Withdrawals Not Supported

Most overseas exchanges do not accept direct deposits or withdrawals in Japanese yen. This means users must either purchase crypto at a domestic exchange and transfer it, or use a credit card. This process can involve extra fees and longer processing times.

Security and Hacking Risks

Overseas exchanges are not immune to hacks. Several major platforms have suffered large-scale hacks and asset losses in the past.

To manage these risks, consider the following:

• Diversify assets across multiple platforms
• Store long-term holdings in cold wallets
• Always enable two-factor authentication
• Regularly review security settings

Service Suspension from Regulatory Changes

Overseas exchanges may suddenly suspend services for Japanese users following FSA warnings or regulatory changes. Some have closed Japanese subsidiaries or restricted access for Japanese residents.

To prepare, use multiple platforms and self-custody wallets for important assets. Monitor your exchanges’ regulatory announcements and compliance status regularly.

Understanding the Travel Rule: A Must for Overseas Exchange Users

Recently, the introduction of the “Travel Rule” for crypto transfers has significantly affected cross-border fund flows. The Travel Rule requires notification of sender and recipient details to the recipient exchange during transfers. In Japan, this rule was enacted through amendments to the Act on Prevention of Transfer of Criminal Proceeds to counter money laundering and terrorist financing.

As a result, domestic exchanges must now collect specific information at the time of transfer, impacting users. When sending crypto between domestic and overseas exchanges, consider these key points:

Detailed Information Required for Transfers

Due to the Travel Rule, when transferring crypto from a domestic to an overseas exchange, you must provide detailed sender and recipient information. This typically includes:

• Sender’s name
• Recipient’s name
• Customer ID number
• Blockchain address
• Other information specified by the exchange

Required details may differ by platform, so always confirm in advance. Failure to provide required information can result in transfer rejection.

Transfer Restrictions Between Different Solutions

To comply with the Travel Rule, domestic exchanges have adopted various solutions (e.g., TRUST, Sygna). Transfers may be blocked between exchanges using different solutions.

Overseas exchanges may use proprietary systems, so confirm in advance which solutions are supported by your destination. Transfers between unsupported systems may be rejected, so always check before sending.

Limitations on Transferable Tokens

Even if a domestic exchange handles a particular cryptocurrency, the Travel Rule may restrict transfers of certain tokens. For example, exchanges compatible with certain solutions may only allow transfers of major assets like Bitcoin (BTC) or Ethereum (ETH), with other altcoins restricted.

Before sending, check whether the asset you wish to transfer can be sent between your selected platforms. Restrictions are subject to change, so always review the latest information.

Top 5 Overseas Cryptocurrency Exchanges for Japanese Users

Below, we introduce five overseas cryptocurrency exchanges popular among Japanese users, detailing their features, advantages, and cautions. Use this as a reference to select a platform that fits your investment style.

Exchange 1: Major Global Platform A

This Asia-founded, globally active platform fully supports Japanese and offers over 300 tokens, earning high marks for usability among Japanese investors.

Key Features and Benefits

This exchange’s major advantage is up to 100x leverage, allowing large trades with small capital. The zero-cut system automatically liquidates positions before losses exceed your margin, aiding risk management.

Additional benefits include:

• Japanese language support: Both website and app, as well as customer support, are available in Japanese, minimizing language barriers.
• Extensive token lineup: Trade over 350 cryptocurrencies, including major coins and many others, for diverse investment opportunities.
• User-friendly interface: Intuitive design accommodates everyone from beginners to professionals.

Points to Watch

Consider these cautions:

• No direct JPY deposits/withdrawals: You must purchase crypto at a domestic exchange before transferring, which involves additional steps and fees.
• No trust protection: Not FSA-registered, so trust protection is absent. In case of bankruptcy, assets may not be protected—manage your holdings prudently.

This exchange offers substantial advantages like leverage, token variety, and Japanese support, but also involves risks such as no direct JPY trading and lack of trust protection. Understand these factors and trade at your own risk.

• Security: ★★★☆☆
• Ease of use: ★★★★★
• Fees: ★★★★☆

Exchange 2: Derivatives-Focused Platform B

This global exchange specializes in derivatives and copy trading. It supports Japanese, offers a user-friendly app, and has over 20 million users worldwide.

Key Features and Benefits

A standout feature is leverage up to 125x—appealing to traders seeking higher returns. The zero-cut system prevents debt from losses, making high-leverage trading more accessible, even for beginners.

The robust copy trading feature lets you automatically mirror professional traders’ activity, so even novices can participate easily. Just follow a pro, set trading pairs and amounts, and the system handles the rest—ideal for busy or new users.

The exchange also prioritizes asset protection, publishing asset transparency via Merkle trees and maintaining a reserve ratio above 200%, showing its commitment to safeguarding user funds.

Points to Watch

This exchange is not FSA-registered, so Japanese regulatory risks remain. As with other overseas platforms, direct JPY deposits/withdrawals are unavailable; crypto must be purchased domestically and transferred.

• Security: ★★★★☆
• Ease of use: ★★★★☆
• Fees: ★★★★☆

Exchange 3: Altcoin-Focused Platform C

This Asia-based exchange offers over 700 altcoins—one of the broadest selections in the industry—and hosts user-driven events.

Key Features and Benefits

This exchange’s biggest strength is its extensive selection of over 700 tokens, including many minor and emerging project coins. It is ideal for users seeking broader altcoin exposure.

Spot trading fees are extremely low (0.1%), reducing long-term costs for active traders. Deposits and withdrawals are free, making it suitable for those starting with small amounts.

The site menu and FAQ are available in Japanese, and the mobile app is user-friendly for smooth trading, even on the go—features appreciated by many users.

Points to Watch

Despite its wide token variety and low fees, there are caveats. The exchange has experienced major hacking incidents in the past. Security has since been upgraded with 2FA and advanced encryption, but always verify current security measures before use.

Since the exchange is based in Asia, it is subject to various regulations, and past service restrictions for Japanese users have occurred—stay alert to regulatory developments.

• Security: ★★★☆☆
• Ease of use: ★★★☆☆
• Fees: ★★★★★

Exchange 4: Copy Trading-Focused Platform D

This exchange serves over 5 million users in more than 100 countries. Its advanced trading features and user-friendly design suit both beginners and pros. Its proprietary copy trading system enables even derivatives novices to follow pro traders with ease, making the platform accessible and secure for all users.

Key Features and Benefits

Notable features include:

• Comprehensive trading tools: Supports not just crypto, but FX, stock indices, and precious metals, broadening investment options. Also offers futures and grid trading in addition to copy trading.
• Security: Third-party audits, AI-based identity checks, and advanced security protocols protect user assets and build trust.

It supports over 600 cryptocurrencies and offers full Japanese language support, making it user-friendly for Japanese investors.

Points to Watch

There are some drawbacks: Not FSA-registered, so there is future regulatory risk. Some advanced features (staking/lending) are restricted. Fees are somewhat higher, and the trading system is complex, which may challenge beginners.

• Security: ★★★☆☆
• Ease of use: ★★★★☆
• Fees: ★★★★☆

Exchange 5: Platform E—Largest Token Selection

This Asia-based exchange lists over 2,900 cryptocurrencies—far more than competitors—and is known for rapid new listings, enabling early access to promising tokens and offering a unique advantage for early-stage investments.

Key Features and Benefits

Key features include:

• Japanese-language support: The website, app, and customer service are all Japanese-friendly, ensuring responsive support for Japanese users.
• Native token perks: Holders enjoy discounted trading fees, priority access to new token launches, and voting rights for new listings—maximizing both cost efficiency and investment opportunities.
• Credit card purchases: Buy crypto in Japanese yen by credit card, making it easy to start trading without a domestic exchange.

The most distinctive aspect is the combination of an extensive token lineup and rapid listings, especially for minor and newly launched coins.

Points to Watch

Direct JPY trading is not available, so you must use domestic exchanges or credit cards, which can incur extra fees and forex costs. Trading fees are comparatively high, but native token holders receive discounts.

• Security: ★★★☆☆
• Ease of use: ★★★★☆
• Fees: ★★★☆☆

Summary: Choose Overseas Exchanges Carefully Based on Your Needs

Overseas exchanges offer a wide selection of tokens and advanced trading features not available domestically, making them a compelling choice for investors seeking broader opportunities. However, they operate under different regulations, so extra diligence regarding security and asset protection is critical.

Compliance with regulations such as the Travel Rule is essential, so always confirm transfer requirements and destination details. This article has compared popular overseas platforms and highlighted key points for mitigating risks and maximizing benefits.

When selecting an overseas exchange, evaluate these aspects comprehensively:

• Strength of security systems
• Token variety and diversity
• Fee structure comparisons
• Platform usability
• Reliability and transparency

By choosing the right exchange and preparing for risks, you can fully leverage investment opportunities. Using multiple exchanges and self-custody wallets is also recommended for risk diversification.

Finally, using overseas exchanges is entirely your responsibility. Gather information, manage risks, and always prioritize secure crypto trading.

FAQ

What is the most important factor when choosing a cryptocurrency exchange?

The most important factor is selecting an exchange with high trading volume, strong security, a wide range of tokens, and low fees. Choosing a platform that excels in these areas allows for safe and efficient crypto trading.

What are the main differences between overseas and domestic crypto exchanges?

Overseas exchanges typically offer hundreds of trading pairs, low fees, and advanced API access. Domestic exchanges, meanwhile, are highly secure under FSA regulation and allow convenient yen deposits and withdrawals.

How do I spot a safe, reliable overseas crypto exchange?

Confirm regulatory licenses, insurance coverage, transparent asset management, third-party security audits, a long operational track record, and positive user reviews.

How should I compare overseas crypto exchange fee structures?

Focus on maker/taker fee differences—typical ranges are 0.02%–0.1%. Check for VIP programs, discounts for using native tokens, and benefits based on trading volume. Evaluate the structure based on your trading frequency and token selection.

Which overseas crypto exchanges are most beginner-friendly?

For newcomers, choose platforms with simple interfaces, robust support, and strong security. Look for Japanese language support, high trading volumes, and low fees. Start with small amounts to familiarize yourself with the platform.

How do I deposit or withdraw Japanese yen at overseas crypto exchanges?

Bank transfers and credit card payments are the primary methods. From your account page, select the deposit/withdrawal menu, enter the required information, and complete two-factor authentication. Withdrawals usually process within 24 hours, but fees and processing times vary by platform.

What are the risks and countermeasures for overseas crypto exchanges?

Key risks include security threats and complex tax filing. Choose platforms with multisig and cold wallets, enable two-factor authentication, and use profit/loss management tools for accurate tax calculation. Always file your taxes as required.

How do leverage trading features work at crypto exchanges, and what are the risks?

Leverage trading lets you control a position several times larger than your margin. While this amplifies potential gains, it also increases losses. Main risks include margin calls, forced liquidations, and rapid closures during volatile markets. Many jurisdictions cap leverage at 2x for regulatory reasons.