Self-custodial wallet / non-custodial software in Japan
Publisher of software where users hold their own private keys. The publisher never holds, controls, or has access to user funds.
Self-custodial wallet is permitted in Japan with no licensing burden.
Verdict Details
- Permitted
- yes
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
Key Restrictions
- Cannot offer any crypto-asset exchange services (buying/selling/exchanging/intermediating/managing/transferring for others) as defined under the Payment Services Act — doing so triggers CAESP registration.
- Must not hold, control, or access user private keys or funds — the non-custodial nature is essential to avoid VASP/MSB classification.
- No stablecoin issuance or intermediation through the software — such activities require bank/trust/fund-transfer licensing under the Stablecoin Law.
Key Risks
- Regulatory ambiguity risk: Japanese regulators (FSA/JVCEA) could re-interpret software distribution as 'management of crypto-assets for others' if the software has centralized features (e.g., hosted key recovery, fee structures tied to transactions).
- Enforcement risk: Unlicensed operators providing wallet services that verge on custodial or intermediation functions face FSA administrative orders, penalties, or criminal referral.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
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.
Definition of Crypto-Assets: Legally defines crypto-assets as property values that can be used for payment to unspecified persons, can be bought/sold, and can be transferred electronically.
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.
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.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Permitted — publishing non-custodial wallet software where the publisher never holds user private keys or funds does not trigger VASP (CAESP) classification under the Payment Services Act, so no licensing or AML obligations attach, provided the software lacks any custody, exchange, or intermediation functions.
Questions this verdict aims to answer
- Does software publishing trigger VASP / MSB classification?
- Do AML obligations attach when no custody exists?
- What disclosure or consumer-protection rules apply?