Crypto ATM / kiosk operator in Japan
Physical kiosks that exchange cash for crypto (and sometimes vice versa). High-cash AML risk profile.
Crypto ATM is conditionally permitted in Japan with a local entity, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- Comprehensive KYC (customer identification, verification) required under PSA and FATF-aligned AML/CFT rules
- Transaction monitoring for all cash-in/cash-out crypto transactions
- Suspicious Activity Reporting (SAR) obligations to FSA
- Travel Rule compliance (originator/beneficiary information sharing) for transactions
- Cash transaction reporting — the PSA/FSA framework applies to all CAESP-registered entities operating crypto-asset exchange services, including cash-to-crypto at kiosks
Key Restrictions
- Must register as a Crypto-Asset Exchange Service Provider (CAESP) with the FSA — no kiosk-specific license exists; kiosk operators fall under the general VASP/CAESP regime
- Minimum capital of JPY 10M (~$70K USD) required
- Must maintain positive net assets at all times
- Must join JVCEA (mandatory self-regulatory organization) and comply with its operational rules
- Customer crypto-assets must be segregated (trust account or equivalent); 100% cold storage recommended
- Margin trading (if applicable) capped at 2x leverage — but kiosks typically do not offer margin
- Stablecoin intermediation at kiosks requires separate fund transfer service provider registration
- 6–18 month application timeline for FSA registration
Key Risks
- High-cash AML risk profile attracts enhanced scrutiny from FSA given enforcement posture
- Cash-to-crypto kiosks present higher typology risk for money laundering and terrorist financing, likely triggering on-site inspections
- No dedicated kiosk-specific license pathway — regulatory ambiguity around how cash transaction reporting thresholds apply to crypto kiosks specifically
- Potential NTA scrutiny on cash transaction reporting for amounts over JPY 2M per transaction (general cash reporting rules may apply)
- Enforcement precedent: FSA can issue administrative orders, impose penalties, and revoke licenses for non-compliance
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
FSA/JFSA — CAESP registration, exchange oversight, stablecoin regulation, policy development
JVCEA — Mandatory self-regulatory organization — token listing standards (green/white list), operational rules, member monitoring
Payment Services Act (amended 2017, 2020) (2017) — CAESP registration, crypto-asset definition, customer asset segregation
VASP: CAESP registration with FSA. JPY 10M (~$70K USD) minimum capital. Must maintain positive net assets. 100% cold storage recommended for customer assets. JVCEA membership mandatory. 6-18 month application timeline. Token listings pre-screened by JVCEA.
CUSTODY: Included under CAESP registration. Mandatory segregation of customer assets (trust account or equivalent). Multi-signature wallets, penetration testing, internal audits required.
EXCHANGE: CAESP registration required. Margin trading capped at 2x leverage. Stablecoin intermediation requires separate fund transfer service provider registration.
Licensing and Registration: All crypto-asset exchange service providers (VCEPs) must be licensed and registered with the FSA. This is a rigorous process.
Licensing Requirement: Mandates that all entities operating "Crypto-Asset Exchange Services" (which include buying/selling, exchanging, intermediating, managing, or transferring crypto-assets for others) must register with and obtain a license from the FSA.
Core Requirements for Licensed Exchanges (VCEPs):
Segregation of Customer Assets: VCEPs must segregate customer crypto-assets from their own assets. Cold wallets are preferred for a significant portion of customer holdings.
Robust Security Measures: Strict requirements for cybersecurity, including multi-signature wallets, penetration testing, and internal audits.
Anti-Money Laundering (AML) & Counter-Terrorist Financing (CFT): Comprehensive Know Your Customer (KYC) procedures, transaction monitoring, and suspicious activity reporting (SAR) obligations. These align with FATF recommendations.
Regulator: Financial Services Agency (FSA).
Regulator: National Tax Agency (NTA).
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — Crypto ATM/kiosk operators in Japan must register as CAESP (Crypto-Asset Exchange Service Provider) with the FSA, join JVCEA, meet JPY 10M minimum capital and asset segregation requirements, and comply with comprehensive AML/KYC obligations, but there is no dedicated kiosk-specific license and cash transaction reporting thresholds are not explicitly defined for kiosks under the current framework.
Questions this verdict aims to answer
- What money-transmitter / kiosk-specific license is required?
- What cash-transaction reporting thresholds apply?
- What enhanced-KYC obligations attach to cash-in / cash-out?