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

Is It Illegal to Use Overseas Cryptocurrency Exchanges?

Is using overseas cryptocurrency exchanges illegal in Japan? In short, Japanese residents are not prohibited from using overseas cryptocurrency exchanges. While current Japanese law requires exchanges to register with the Financial Services Agency (FSA), there are no direct regulations targeting individual users.

Legal Basis

Japan’s Payment Services Act requires cryptocurrency exchange operators to register with the Prime Minister, but this law primarily regulates the service providers, not the users. Operating an unregistered exchange is illegal, yet individuals are not legally restricted from accessing services offered by unregistered exchanges.

Even so, users must trade at their own risk. Exchanges operating outside FSA oversight may not provide sufficient protection in the event of disputes, so caution is advised.

Overseas Exchange Registration and Common Misconceptions

Many overseas cryptocurrency exchanges are not registered with Japan’s FSA, which can cause concern among Japanese users. In some cases, the FSA has instructed exchanges to restrict local access for Japanese residents.

These cases sometimes lead to the misconception that “overseas exchanges = illegal,” but the law does not prohibit Japanese individuals from personally using unregistered exchanges. What matters most is to carefully review each exchange’s operations and security systems, understand the risks, and proceed with informed judgment.

Security Considerations

Exchanges not registered with the FSA may present security risks, including vulnerability to hacking and the potential for fraudulent tokens.

When using overseas exchanges, you should confirm the following:

• Exchange operating history and reputation
• Security protocols (two-factor authentication, cold wallet management, etc.)
• Record and handling of past security incidents
• User reviews and marketplace reputation
• Transparency initiatives, such as proof of reserves

Assess these factors as a whole and choose an exchange you can trust—this is the foundation of safe trading.

Key Factors for Choosing a Cryptocurrency Exchange

When selecting a cryptocurrency exchange, several critical criteria deserve attention. Below, we detail five essential factors to consider.

Security Strength

Security should be the top priority. Protecting client assets is fundamental, so verify which measures the exchange implements.

Key security features include:

• Two-factor authentication (2FA): Prevents unauthorized access by requiring an extra step at login or withdrawal
• SSL encryption: Secures communication and prevents data interception
• Cold wallet storage: Keeps most assets offline, reducing risk of hacking
• Multi-signature authorization: Requires multiple approvals, mitigating damage from key leaks

Also check for robust server stability, comprehensive anti-hacking protections, and responsive support. If past security incidents occurred, the exchange’s subsequent response and improvements are important indicators. Strong security creates a foundation for worry-free trading.

Diversity of Tokens

The range of available tokens is another key factor. While most exchanges support Bitcoin and Ethereum, the selection of other altcoins varies.

Benefits of a broad selection:

• Enables diversification and improved risk management
• Provides early investment access to new projects
• Facilitates flexible portfolio construction
• Allows agile asset reallocation as market trends shift

Choose exchanges that offer both major and minor coins for greater investment opportunities. However, more tokens do not automatically mean a better exchange—always check liquidity and reliability as well.

Fee Structure

Fees are a crucial consideration. They have a significant impact on long-term trading costs, so close comparison is essential.

Key fee categories:

• Trading fees (maker/taker): Basic charges per transaction
• Spread: Difference between buy and sell prices in brokerage format
• Deposit fees: For fiat and crypto deposits
• Withdrawal fees: For moving assets out of the exchange
• Transfer fees: For sending crypto to other wallets or exchanges

Lower fees mean lower operating costs. Compare multiple exchanges to determine which offers the best value for your trading style. Even small differences can add up for active traders. Also consider fee discounts for high volume traders or proprietary token holders.

Usability and Convenience

Trading tool usability is also critical. Smooth, intuitive operation supports trading success.

Usability criteria include:

• Intuitive interface: Easy for beginners to navigate
• Mobile app performance: Effective trading on the go
• Order type variety: Market, limit, and stop orders
• Comprehensive charting: Tools for technical analysis
• Execution speed and server reliability

Simpler exchanges are best for beginners, while advanced traders should look for robust analysis and automation tools. Match your choice to your trading style for long-term results.

Reliability and Regulatory Compliance

Reliability is essential. For safe overseas trading, select exchanges with transparent operations and strong compliance.

Reliability checklist:

• Publicly available due diligence reports
• Merkle tree-based proof of reserves
• Independent third-party audits
• History of security incidents or asset losses
• Regulatory status in relevant jurisdictions
• Corporate transparency (location, leadership disclosure)

Due Diligence for Transparency

Due diligence involves independent investigation of risks related to a company or project, with public disclosure of findings. This process helps investors accurately assess risks and enhances transparency. Reliable exchanges publish due diligence results regularly.

Merkle Tree for Transparency

The Merkle tree structure enables efficient and secure verification of blockchain data integrity. Tampering is quickly detected, strengthening confidence in transactions and asset management. Exchanges using Merkle tree for reserve proof show commitment to asset protection.

Benefits and Drawbacks of Overseas Cryptocurrency Exchanges

Benefits of Overseas Exchanges

Extensive Token Selection

Major overseas exchanges list thousands of cryptocurrencies—far more than domestic exchanges.

Advantages of a broad selection:

• Access to trendsetting tokens absent from domestic platforms
• Early investment in new projects
• Portfolio diversification and risk management
• Investment opportunities in niche markets

However, some coins lack liquidity and may be highly volatile, so thorough research is essential before investing.

Lower Spreads and Fees

Overseas exchanges generally offer tighter spreads, lowering trading costs for active traders. Spread is the difference between buy and sell prices; narrower spreads reduce effective costs.

Cost-saving benefits:

• Lower spreads than domestic platforms help reduce transaction costs
• Fees are typically lower as well
• Favorable for short-term and arbitrage trading
• High-volume traders benefit most from cost savings

Long-term holders may see limited advantage, but active traders can realize significant savings.

High Leverage Trading

Overseas exchanges allow leverage up to 100x or more, compared to the 2x limit domestically. Leverage lets traders pursue outsized gains with modest capital, but also raises risk of losses.

High leverage pros and cons:

• Large positions with small margin
• Efficient capital use and diversified investments
• Zero-cut systems prevent losses beyond margin
• High risk—requires disciplined risk management

Zero-cut systems automatically close positions before losses exceed margin, eliminating margin call risk typical of domestic exchanges. Still, poor risk management can result in rapid loss of funds, so caution is crucial.

Drawbacks of Overseas Exchanges

Support Language Limitations

Some overseas exchanges offer support only in English. While basic trading is unaffected, inquiries may require translation tools.

Language barrier risks:

• Slower emergency response
• Difficulty explaining complex issues
• Time-consuming reading of terms and notices
• Greater risk of misunderstandings or errors

Recently, more exchanges are offering Japanese support, but full support remains limited. If language is a concern, select exchanges with robust Japanese language options.

No Direct Japanese Yen Withdrawals

Direct withdrawals to Japanese bank accounts are not available—you must use a domestic exchange as an intermediary, adding steps and potential fees.

Withdrawal process:

1. Hold crypto at overseas exchange
2. Transfer crypto to domestic exchange
3. Convert to yen at domestic exchange
4. Withdraw to Japanese bank account

This process involves transfer fees and time delays. The travel rule may also require detailed information during transfers.

Hacking Risks

Hacking remains a risk at overseas exchanges, with several major incidents reported. Protect your assets by following these best practices:

• Distribute assets across multiple exchanges
• Store long-term holdings in cold wallets
• Always enable two-factor authentication
• Change passwords regularly
• Be vigilant for phishing emails and spoofed sites

While hacking risk cannot be eliminated, strong security practices can minimize potential losses.

Risk of Sudden Service Suspension

Overseas exchanges may suspend service to Japanese users due to FSA warnings or business challenges. Some major platforms have closed Japanese operations or blocked local access.

Prepare for service disruptions:

• Open accounts at several exchanges
• Monitor regulatory news regularly
• Move long-term holdings to self-custody wallets
• Never ignore important exchange notifications

Because Japanese user support is unstable, always be aware of regulatory changes and service suspensions, and be ready to adapt.

Understanding the Travel Rule Is Essential When Using Overseas Exchanges

The travel rule requires exchanges to share sender and recipient details during crypto transfers. Japan recently introduced this rule to combat criminal proceeds and terrorist financing, impacting users of domestic exchanges.

Detailed Transfer Information Required

When sending crypto from domestic to overseas exchanges, you must provide detailed sender and recipient information.

Required information examples:

• Sender’s name
• Recipient’s name
• Customer ID number
• Blockchain address
• Purpose of transfer
• Relationship to recipient

Requirements vary by exchange, so confirm in advance and prepare all necessary information. Missing details may result in transfer rejection or delays.

Transfers May Be Blocked Between Exchanges Using Different Travel Rule Solutions

Domestic exchanges use various travel rule solutions, and incompatibility may prevent transfers between different platforms.

Main solutions:

• TRUST: Adopted by some domestic exchanges
• Sygna: Used by other groups
• Other proprietary systems

Foreign exchanges may use different solutions as well. Always confirm compatibility before initiating a transfer, and consider alternative routes if needed.

Some Cryptocurrencies May Not Be Transferable

Even supported cryptocurrencies may be restricted by the travel rule.

Examples of transfer restrictions:

• Some exchanges only allow transfers of major coins (Bitcoin, Ethereum)
• Minor coins may be restricted
• Additional limits may apply to stablecoin transfers

Check which tokens are supported before sending funds. If needed, exchange to a supported coin prior to transfer. The travel rule is evolving, so always stay updated.

Top 5 Overseas Cryptocurrency Exchange Rankings

Exchange A

Exchange A is a major Asia-based platform fully supporting Japanese language and offering over 300 tokens, making it user-friendly for Japanese traders.

Exchange A Features

Exchange A supports leverage trading up to 100x, allowing large positions with relatively small capital. Its zero-cut system automatically closes positions before losses exceed margin, helping users manage risk effectively.

Main features:

• Japanese support: Fully localized website and app, plus Japanese customer service and inquiries for easy access
• Extensive token selection: Over 350 cryptocurrencies available, including all major tokens
• Advanced trading tools: Professional-grade analytics and automated trading
• Low trading fees: Competitive rates (Maker 0.01%, Taker 0.06%)

Cautions

No Direct Yen Deposits or Withdrawals

Direct deposit or withdrawal in yen is not supported, so you must buy crypto at a domestic exchange and transfer it, incurring additional fees and steps.

No Trust Asset Protection

Since the exchange is not registered with the FSA, assets are not protected by trust. In case of bankruptcy, your assets may not be recoverable. Move large holdings to a self-custody wallet regularly.

While leverage, token diversity, and Japanese support are major strengths, the lack of direct yen transactions and trust protection pose risks. Understand these points and trade at your own risk.

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

Exchange B

Exchange B is a global platform recently launched, featuring advanced derivatives and copy trading. It offers Japanese support and a user-friendly mobile app, with over 20 million users worldwide, including many in Japan.

Exchange B Features

Key features include leverage trading up to 125x, ideal for traders seeking high returns. Its zero-cut system ensures no debt from failed trades, making leveraged trading accessible to beginners.

The copy trading function allows users to automatically follow professional traders, making crypto trading easy for newcomers.

Copy trading options:

• Futures copy trading: Higher risk, higher reward
• Spot copy trading: Lower risk, stable returns
• Bot strategy copy trading: Automated, efficient trading

Simply follow a pro trader and set your target coins and amounts to begin. This feature is especially convenient for busy or inexperienced users.

Additionally, the exchange prioritizes asset protection, publicly disclosing proof of reserves with a reserve ratio over 200%, highlighting its commitment to safeguarding user funds.

Cautions

Like other overseas platforms, Exchange B is not FSA-registered, so there is some regulatory risk in Japan. Direct yen deposits/withdrawals are also unavailable; purchase crypto at a domestic exchange first.

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

Exchange C

Exchange C is an Asia-based platform with a wide range of tokens and user events, including over 700 altcoins—among the most in the industry.

Exchange C Features

Extensive Token Selection

Exchange C’s biggest strength is its selection of over 700 tokens, including many minor altcoins and "grass coins," broadening investment opportunities for those interested in niche markets.

Minor coin characteristics:

• Large price swings and short-term profit potential
• Early access to new projects
• Unique investment opportunities in specialized markets
• Lower liquidity and higher risk—requires caution

Low Fees

Spot trading fees are just 0.1%, making it highly cost-effective for frequent traders. Deposits and withdrawals are also free, making it suitable for small investments.

Fee advantages:

• No cumulative cost for frequent trades
• Minimal burden for small transactions
• Long-term cost savings

Beginner-Friendly Japanese Support

The official site and FAQ are available in Japanese, and the mobile app is easy to use, ensuring smooth trading for beginners.

Cautions

Although widely supported for its token diversity and low fees, Exchange C has some cautions:

It experienced a past hacking incident, but users were fully compensated and security protocols have since been strengthened. Always check the latest security status before use.

Based in Asia, the exchange may be subject to political and regulatory changes. Some countries have strict crypto policies, and expanded regulation may pose risks. In the past, services for Japanese users have been temporarily restricted, so monitor regulatory developments closely.

If the exchange fails, assets may not be protected, so regularly transfer large holdings to your own wallet.

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

Exchange D

Exchange D is a newer platform serving over five million users in more than 100 countries. Its advanced trading features and user-friendly design appeal to both new and experienced traders.

Features

Key features:

Advanced Trading Tools

Supports MetaTrader 5 (MT5), enabling crypto, FX, stock index, and precious metals trading. Offers copy trading, futures, and grid trading for various strategies.

Tool advantages:

• Advanced analytics for professionals
• Diversification across asset classes
• Easy automation of trading strategies
• Customizable interface

Robust Security

Third-party audits verify proof of reserves, supporting user fund protection. AI-powered KYC and bank-grade security create a safe environment.

With over 600 supported cryptocurrencies and full Japanese support, it is also accessible for Japanese users.

Cautions

Exchange D is not FSA-registered, which may pose future regulatory risks. It also lacks DeFi features such as staking and lending.

Other considerations:

• Fees are higher than some competitors
• The complex trading system may be challenging for beginners
• Assets may not be protected if the exchange fails

Past security incidents have resulted in significant losses, so transfer large assets to self-custody wallets for safety.

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

Exchange E

Exchange E is an Asia-based platform with more than 2,900 listed cryptocurrencies—far more than most competitors. Rapid new listings enable early access to promising tokens and projects.

Main features:

Japanese Customer Support

The website, app, and customer service all support Japanese, allowing users to get quick help and trade confidently.

Support advantages:

• 24/7 customer service
• Multiple contact channels: chat, email, phone
• Detailed Japanese-language FAQ and guides
• User forums for information exchange

Proprietary Token Benefits

Holding the platform’s proprietary token provides discounted trading fees, priority IEO access, and voting rights for new tokens, unlocking both lower costs and more investment opportunities.

Proprietary token advantages:

• Up to 50% off trading fees
• Early access to new projects
• Community governance participation
• Staking rewards

Credit Card Purchases

Buy crypto with Japanese yen via credit card—no need for a domestic exchange, enabling rapid trading.

This exchange stands out for its vast token selection and quick new listings, especially for minor coins and newly launched tokens.

Cautions

Direct trading in yen is unavailable; you must transfer crypto from a domestic exchange or use a credit card, which may incur fees and currency conversion costs.

Further cautions:

• Fees are somewhat higher than competitors, but proprietary tokens offer discounts

• The large number of tokens may include fraudulent projects—research thoroughly

• Assets may not be recoverable if the exchange fails; avoid leaving large holdings unattended

• Security: ★★★☆☆

• Ease of Use: ★★★★☆

• Fees: ★★★☆☆

Summary: Select Overseas Exchanges Carefully For Your Needs

Overseas cryptocurrency exchanges offer broad token variety and advanced trading functions not found in domestic platforms, making them attractive for investors seeking diversification. However, different regulations mean you must pay close attention to security and asset protection.

Key points for using overseas exchanges:

• Review security measures: 2FA, cold wallet management, incident response, etc.
• Compare fees: trading, transfer, spreads, and overall costs
• Check token availability: ensure your investment strategy matches supported coins
• Confirm Japanese support: for emergencies and inquiries
• Stay aware of regulatory risks: monitor FSA updates and exchange policies

Compliance with travel rule and similar regulations requires proper information sharing and transfer destination checks. Using multiple exchanges and combining domestic and overseas platforms can help diversify risks and optimize trading.

This article compared popular overseas exchanges and explained how to manage risks and maximize their benefits. Each exchange has its own strengths and weaknesses; select one that fits your trading style and investment goals.

By choosing the right platform, implementing rigorous security, and preparing for risks, you can fully leverage overseas exchanges’ investment opportunities. Always stay informed and act with caution for successful trading.

FAQ

What Are the Most Important Factors When Selecting an Overseas Cryptocurrency Exchange?

Review robust security practices, regulatory approval, trading volume, fee structure, and transparency in identity verification. Confirm multi-signature and cold wallet features for security.

How Do Overseas Exchanges Differ From Domestic Exchanges?

Overseas exchanges offer hundreds of currencies, more flexible regulations, and lower fees. Domestic exchanges operate under strict FSA oversight, provide higher safety, and support direct yen deposits and withdrawals. Overseas platforms also offer advanced API and smart contract integration.

How Can I Assess the Safety and Reliability of a Cryptocurrency Exchange?

Check for regulatory approval, two-factor authentication, asset insurance, transparent security disclosures, independent audits, reliable third-party reviews, and sound fund management.

What Is the Typical Fee Structure at Overseas Exchanges?

Spot trading fees are typically around 0.1%. Fees are calculated per transaction—for example, a $10,000 trade would cost $10. Some exchanges offer 0% Maker fees.

What Features Do Recommended Overseas Exchanges for Beginners Offer?

Beginner-friendly overseas exchanges offer low minimum trades and a wide range of rare coins. Note that Japanese support is often limited, and lack of FSA approval may impact reliability.

What Documents Do I Need to Open an Account at an Overseas Exchange?

You’ll need a passport, national ID card, or driver’s license. Please also provide your email address.