How to Choose a Cryptocurrency Exchange: Top 5 Recommended Overseas Platforms

Is It Illegal to Use Overseas Cryptocurrency Exchanges?

Is it against the law to use overseas cryptocurrency exchanges from within Japan? In short, it is not illegal for Japanese nationals to use foreign cryptocurrency exchanges. Japanese regulations require cryptocurrency exchanges operating in Japan to register with the Financial Services Agency, but there are no restrictions placed on individual users.

Legal Framework

Under Japan’s Payment Services Act, operators of cryptocurrency exchange businesses must register with the Prime Minister. This legislation regulates the providers of cryptocurrency exchange services, not the users. Therefore, it is legally permissible for individuals to use overseas exchanges.

However, “legal usage” does not equate to “guaranteed safety.” If you use exchanges that are not overseen by the Financial Services Agency, you must understand that your personal responsibility is heightened.

Registration Status and Common Misconceptions

Most overseas cryptocurrency exchanges are not registered with the Japanese Financial Services Agency, which can cause concern among domestic users. Legally, however, personal use of unregistered exchanges by Japanese nationals is not a violation.

Exchanges that are not registered with the Financial Services Agency are not subject to Japanese legal protections or oversight. This means your recourse in the event of a dispute may be limited. It’s important for users to understand this and choose exchanges at their own discretion.

Security Considerations

Overseas exchanges that lack registration with the Financial Services Agency may pose increased security risks. There have been cases of large-scale asset theft through hacking and incidents involving fraudulent cryptocurrencies.

Before using any overseas exchange, thoroughly research its operational history, security protocols, and record of past incidents. Employ risk management strategies such as splitting your assets across multiple platforms and using cold wallets.

Essential Factors When Choosing a Cryptocurrency Exchange

Security Standards

Security is the top priority when selecting an exchange. Protecting user assets is paramount in crypto trading, and inadequate security exposes you to significant risk.

Confirm that the following security measures are in place:

• Two-Factor Authentication (2FA): Requires an authentication code in addition to a password for login and withdrawals
• SSL Encryption: Secures communications between users and the exchange, preventing data interception
• Cold Wallet Storage: Keeps the majority of client assets offline, away from internet access
• Multisignature Support: Requires multiple signatures for transactions, mitigating risks from leaked private keys
• Regular Security Audits: Conducted by independent third parties

Choosing an exchange that combines these measures helps ensure the safety of your assets.

Wide Selection of Tokens

The number of tokens available is a key consideration when selecting an exchange. The more tokens, the more diverse your investment opportunities and easier portfolio diversification becomes.

Some exchanges offer both major altcoins and emerging minor tokens. If you seek early access to promising new projects, select an exchange with broad token support.

Keep in mind that a large number of tokens may include those with low liquidity. Always check trading volume and market activity as well.

Fee Structures

Fees are another crucial factor. Trading costs can significantly affect your long-term investment returns.

Key fee categories to check:

• Trading Fees: Charged per transaction, typically 0.05–0.2% depending on the exchange
• Spread: The difference between buy and sell prices; this represents the effective transaction cost
• Deposit Fees: Charged when funding your account
• Withdrawal Fees: Charged when withdrawing funds from the platform
• Transfer Fees: Charged when sending crypto to another wallet or exchange

Frequent traders should pay particular attention to small fee differences, as these add up over time. Pick an exchange that fits your trading style for optimal cost efficiency.

Platform Usability and Convenience

User interface and trading tool usability are also critical. Poor design can cause missed trading opportunities.

Key usability features to check:

• Intuitive Interface: Clear menus and straightforward access to essential functions
• Mobile App Performance: Enables smooth trading on the go
• Order Types: Availability of market, limit, and stop orders
• Robust Chart Tools: Comprehensive technical analysis features
• Japanese Language Support: Website/app and customer support available in Japanese

Beginners should look for platforms with simple, user-friendly designs; advanced users may benefit from sophisticated analysis tools.

Reliability and Regulatory Compliance

For safe overseas trading, choose exchanges with transparent operations. Look for platforms that openly publish due diligence and Merkle Tree proof-of-reserves data.

Review any history of security incidents or asset loss. Even if issues occurred, check whether the exchange responded appropriately and implemented preventive measures to gauge reliability.

Advantages and Disadvantages of Overseas Crypto Exchanges

Advantages

Extensive Token Selection

Overseas exchanges list a vast range of tokens. Some major platforms offer hundreds or thousands of cryptocurrencies—far more than domestic exchanges.

While domestic platforms only list tokens carefully screened under Financial Services Agency rules, overseas exchanges feature many trendsetting and emerging tokens. This offers more opportunities to invest early in promising projects.

However, some tokens may lack liquidity. Always research project credibility, development teams, and community engagement before investing.

Low Spread and Fees

Overseas exchanges generally offer narrower spreads, lowering costs for frequent traders.

Compared to domestic exchanges, these platforms often enable lower buy/sell costs, which can have a major impact on short-term trading profits.

For long-term investors, spread differences are less impactful, but for active trading, they are crucial.

High Leverage Trading

Foreign exchanges allow much higher leverage than Japan’s 2x cap—some go up to 100x or more.

Many offer zero-cut systems, automatically liquidating positions so losses never exceed your margin deposit. This helps you avoid debt in highly volatile markets.

High-leverage trading is high risk/high reward and is not recommended for beginners. Only use it after gaining sufficient knowledge and experience.

Disadvantages

Customer Support Language Barriers

Some overseas exchanges only offer support in English. You may need translation tools, which can slow down communication in case of issues.

Japanese language support is increasing, but full support is still rare. Always confirm the level of language assistance beforehand.

No Direct Japanese Yen Withdrawal

You cannot withdraw funds directly from overseas exchanges to Japanese bank accounts. To cash out in yen, transfer crypto to a domestic exchange and convert it there.

This process incurs transfer and sale fees and may take additional time, which is inconvenient for urgent withdrawals.

Hacking Risks

Hacking is a risk with overseas exchanges, and major incidents have occurred on leading platforms.

Recommended safety measures:

• Diversify assets across multiple exchanges
• Use cold wallets for long-term holdings
• Enable two-factor authentication
• Change passwords regularly
• Beware of phishing scams

Following these steps helps minimize hacking risks.

Sudden Service Suspension Risk

Overseas exchanges may abruptly restrict Japanese users in response to Financial Services Agency warnings, operational changes, or new regulations.

Some exchanges have suspended services for Japanese clients in the past. If notified, you must promptly withdraw your assets, which incurs fees and effort.

To mitigate this risk, stay updated on regulatory changes and diversify your assets across multiple platforms.

Travel Rule Compliance Is Essential for Overseas Exchange Use

The “Travel Rule” is a global standard requiring exchanges to share sender and recipient information during crypto transfers. Japan has adopted the Travel Rule through anti-money laundering amendments in recent years.

This regulation makes crypto transfers more complex and requires users to provide additional information. Understand Travel Rule implications before using overseas exchanges.

Detailed Transfer Information Required

Under the Travel Rule, sending crypto from domestic to overseas exchanges requires notification of sender and recipient details.

Required information includes:

• Sender’s name
• Recipient’s name
• Customer ID number
• Blockchain address
• Purpose of transfer
• Other information as requested by the exchange

Failure to provide complete information may result in transfer refusal or account freeze. Always enter all required details accurately before transferring.

Transfers Between Exchanges With Different Solutions May Be Blocked

Japanese exchanges use different Travel Rule compliance solutions such as “TRUST” or “Sygna.” Transfers between platforms using incompatible systems may be technically impossible.

This issue can affect domestic and overseas transfers. Always verify transfer compatibility before initiating transactions.

Some Cryptocurrencies Cannot Be Transferred

Even if a token is supported by a Japanese exchange, Travel Rule restrictions may prevent transfers—especially for privacy coins or tokens the receiving platform does not accept.

Before overseas transfers, confirm:

• Whether the token is Travel Rule compliant
• Whether the recipient exchange supports the token
• Transfer amount limits
• Required time and fees

Advance checks help you avoid transfer troubles.

Top 5 Overseas Cryptocurrency Exchanges

Exchange A: Global Major Platform

Founded in Asia and now based in the Middle East, this leading exchange offers full Japanese support and over 300 tokens—making it highly accessible for Japanese users.

Key Features

Maximum leverage of 100x is available, with a zero-cut system to automatically limit losses to your margin deposit.

Comprehensive Japanese Support: The website and app offer full Japanese localization, and customer support is accessible in Japanese. Support is available 24/7 via chat and email, making it beginner-friendly.

Wide Token Selection: Over 350 cryptocurrencies are available, including major assets like Bitcoin and Ethereum. New tokens are added regularly, providing access to the latest projects.

Advanced Trading Features: Supports spot, futures, options, and staking. Proprietary trading bots and copy trading are available, catering to both beginners and advanced traders.

Cautions

No Direct Yen Deposit/Withdrawal: You must purchase crypto on a domestic exchange before transferring. Credit card purchases are possible, but fees are higher.

No Trust Asset Protection: Not registered with the Japanese Financial Services Agency, so assets are not protected under Japanese law. In case of bankruptcy, asset protection is not guaranteed.

Security: ★★★☆☆
Ease of Use: ★★★★★
Fees: ★★★★☆

Exchange B: Derivatives Specialist Platform

Recently established and based in the Caribbean, this global exchange specializes in derivatives and copy trading, serving over 20 million users worldwide.

Key Features

Up to 125x leverage is available, with a zero-cut system ensuring losses never exceed collateral.

Proprietary Copy Trading: Automatically follows professional traders’ strategies. Three types available:

• Futures Copy Trading: Aggressive, high-risk/high-return
• Spot Copy Trading: Stable, lower-risk
• Strategic Bot Copy Trading: Automated, strategy-driven

Copy trading allows less experienced users to benefit from expert strategies.

Transparent Asset Management: Proof-of-reserves using Merkle Tree, with reserve ratios over 200%, enables users to verify financial stability.

Diverse Trading Options: Spot, futures, margin, staking, lending. Holding the platform’s token provides fee discounts and event access.

Cautions

Not registered with the Financial Services Agency, so regulatory risk for Japanese users remains. Future restrictions are possible.

No direct yen deposit/withdrawal; domestic exchanges must be used. Transfers require Travel Rule-compliant information.

Security: ★★★★☆
Ease of Use: ★★★★☆
Fees: ★★★★☆

Exchange C: Altcoin-Focused Platform

Based in Hong Kong and founded in recent years, this exchange offers over 700 tokens and user-driven events, making it an industry leader in token variety.

Key Features

Massive Token Selection

Offers more than 700 cryptocurrencies, including major, minor, and early-stage project tokens, creating unique investment opportunities.

Rapid new listings enable early access to trending projects. Active participation in ICOs and IEOs provides early investment opportunities in high-growth projects.

Low Trading Fees

Spot trading fees are just 0.1%, among the lowest in the industry, with free deposits and withdrawals. Holding the platform’s token yields further discounts.

Beginner-Friendly Japanese Support

Menus and FAQs are available in Japanese, and the mobile app is designed for ease of use. Tutorials and guides support new users.

Cautions

The exchange suffered a major hacking incident with asset outflows but has since strengthened security through multi-layer defenses and cold wallet management. Always confirm current security status before using.

Although based in Hong Kong, the platform may be affected by China’s regulations. Temporary service restrictions for Japanese users have occurred.

Security: ★★★☆☆
Ease of Use: ★★★☆☆
Fees: ★★★★★

Exchange D: Multi-Asset Platform

Serving over 5 million users in 100+ countries, this recently established platform is popular with both beginner and advanced traders.

Key Features

Comprehensive Trading Tools: Supports MetaTrader 5 (MT5), enabling trading of crypto, FX, indices, and precious metals. MT5 is known for advanced technical analysis and automated trading.

Asset Security: Third-party audits provide proof of reserves, and results are published regularly for transparency.

Diverse Crypto Offerings: Over 600 cryptocurrencies, with full Japanese support. New tokens are added frequently.

Robust Educational Resources: Extensive learning materials for beginners and regular webinars/seminars for skill development.

Cautions

Not registered with the Japanese Financial Services Agency, so future regulatory risk exists. Past security incidents resulted in asset loss, but security has since been enhanced.

No DeFi features and relatively high fees may deter some users.

Security: ★★★☆☆
Ease of Use: ★★★★☆
Fees: ★★★★☆

Exchange E: Token Variety Specialist

Based in Singapore, this platform offers over 2,900 cryptocurrencies—far more than competitors. Fast new listings enable early access to trending tokens.

Key Features

Industry-Leading Token Selection: Over 2,900 cryptocurrencies, including minor coins and emerging projects. New listings are frequent.

Japanese-Speaking Customer Support: Japanese-language site, app, and staff provide responsive assistance.

Proprietary Token Benefits: Token holders receive:

• Trading fee discounts (up to 50%)
• Priority access to IEO events
• Voting rights for new listings
• Increased staking rewards

Credit Card Purchases: Buy crypto directly with Japanese yen via credit card—no domestic exchange required. Note that fees are relatively high.

Diverse Trading Options: Spot, futures, margin, staking, lending, liquidity mining, and robust DeFi services are available.

Cautions

No direct yen trading; you must transfer crypto from a domestic exchange or use a credit card. Credit card purchases are convenient but expensive for large amounts.

Trading fees are higher than competitors, but holding the platform’s token brings discounts. Long-term users should consider holding platform tokens.

With so many tokens listed, there is a risk of scams or illiquid assets. Always research project credibility before investing.

Security: ★★★☆☆
Ease of Use: ★★★★☆
Fees: ★★★☆☆

Summary: Choose Overseas Exchanges Carefully According to Your Needs

Overseas cryptocurrency exchanges offer token variety and advanced features not found in Japan, making them attractive for those seeking expanded investment opportunities. However, they operate under different regulatory environments, so pay close attention to security and asset protection.

Core Principles for Selecting an Exchange

Evaluate exchanges based on these criteria:

1. Security Measures: Two-factor authentication, cold wallet storage, regular audits
2. Token Variety: Does the platform support your desired investments?
3. Fee Structure: Total costs for trading, deposits/withdrawals, and transfers
4. Usability: Interface intuitiveness, Japanese language support
5. Reliability: Operating history, incident record, transparency

Risk Management Strategies

Recommended risk management for overseas exchanges:

• Asset Diversification: Don’t put all assets on one platform
• Use Cold Wallets: Store long-term holdings offline
• Strengthen Security: Enable 2FA, use strong passwords, change passwords regularly
• Stay Informed: Monitor regulations and platform status

Travel Rule Compliance

Complying with regulations like the Travel Rule means providing required information and verifying transfer details. Sending crypto from Japan overseas is now more complex, but these rules are essential for anti-money laundering.

Principle of Personal Responsibility

Using overseas exchanges involves greater risk than domestic ones, but with sound knowledge and risk management, these risks can be minimized. Understand your personal responsibility, research thoroughly, and make careful decisions to maximize your investment opportunities.

All investments carry risk. By choosing the right platform and preparing for potential issues, you can expand your crypto investment opportunities. Select exchanges that fit your style and risk tolerance, and focus on safe, efficient trading.

FAQ

What is the single most important criterion for selecting an overseas cryptocurrency exchange?

Security is paramount. Next, consider token variety, low fees, trading volume, and platform usability. Always prioritize reliability and safety.

How do you evaluate the safety and reliability of an overseas exchange?

Review financial licensing, operating history, company size, asset protection methods, and security incident records. Assess reliability using multiple metrics.

How do major overseas exchanges compare in terms of fees and trading conditions?

Most major overseas exchanges charge around 0.1% for spot trades. Some offer 0% maker fees. Conditions vary, and fees are calculated based on transaction size.

Which overseas crypto exchanges are best for beginners?

BYBIT and Coinlist are recommended for beginners due to their user-friendly designs, strong support, and low fees.

What are the risks and countermeasures when using overseas exchanges?

Risks include fraud, hacking, and regulatory changes. Countermeasures: select trusted exchanges, enable two-factor authentication, and practice strict fund management.

What tax and legal considerations do Japanese users need when using overseas exchanges?

Profits from overseas exchanges are subject to Japanese income tax as miscellaneous income and require tax filing. Failure to file may result in penalties, so accurate reporting is essential.