After Bybit's Japan Shutdown: A Neutral Map of Where Your Funds Can Go

Once your crypto is off Bybit, the next question is simply: where should it go? The internet is full of "best alternative" lists, most of them ranking whoever pays the most. This page does the opposite. It lays out the three factual paths a former Bybit Japan user has — a domestic FSA-registered exchange, self-custody, or another overseas venue — describes what each one actually means for you, and ends with a checklist of factors to weigh. It names no specific brand in any direction, recommends nothing, and warns against no one by name. It is general information, not financial advice.

The three paths, at a glance

Path 1 — A domestic, FSA-registered exchange

This is the regulated domestic route. Operators that serve Japanese residents are expected to be registered with the Financial Services Agency (FSA) as crypto-asset exchange operators under the Payment Services Act, and they appear in the FSA's public register.

What registration actually gives a user

• Asset segregation. Registered operators are required to manage customer assets separately from their own — a core customer-protection rule under the Japanese framework.
• A defined complaint and dispute route. Registered operators sit under FSA supervision and the industry's self-regulatory body, which gives users a recognized channel if something goes wrong.
• JPY on-ramps and off-ramps. Domestic exchanges connect to the Japanese banking system, so moving between yen and crypto is straightforward and reportable.
• A leverage cap of 2x. This is a concrete product difference: individual crypto margin trading in Japan is capped at 2x leverage (reduced to 2x around May 2020 under the amended Financial Instruments and Exchange Act and JVCEA self-regulation). Traders used to higher leverage overseas should note this is a hard limit domestically — presented here as a fact, not a judgment about whether more or less leverage is desirable.

How to check the register

You can confirm whether an operator is registered using the FSA's official search of licensed financial operators at search.fsa.go.jp. Registration is the single verifiable fact that separates this path from Path 3.

Path 2 — Self-custody

Self-custody means holding your crypto in a wallet whose private keys you control directly, rather than leaving it with any exchange. It is not an exchange service and not a product anyone sells you; it is you being your own custodian.

What that responsibility means

• You hold the keys — and the risk. There is no support desk to reset a lost seed phrase. If you lose your keys or recovery phrase, the funds are generally unrecoverable.
• Phishing and scams target self-custody users. Fake wallet apps, malicious approvals, and seed-phrase phishing are common attack vectors; the security burden is entirely yours.
• No counterparty exposure. The flip side: your holdings do not depend on an exchange staying solvent or continuing to serve your country.

When it tends to fit

Self-custody fits long-term holdings you do not intend to trade actively — you gain independence from any single platform's decisions (like a market exit) at the cost of taking on full security responsibility. It fits active trading much less well, since you cannot trade from a self-custody wallet without moving funds to a trading venue.

Path 3 — Another overseas venue

Other overseas exchanges exist, and some serve Japanese residents. Stated plainly and neutrally: many operators that serve Japan residents do so without FSA registration, and that status has concrete consequences worth understanding before moving funds.

The FSA warning-list mechanism

The FSA publishes a public warning list of operators conducting crypto-asset exchange business in Japan without registration, alongside a general caution that dealing with unregistered operators is high risk. In the FSA's words, for unregistered operators the authorities "cannot confirm whether a system to protect investors is in place, and it is highly likely that safeguards equivalent to a registered operator are not in place." You can check whether a given operator appears on that list yourself:

• FSA warning page on unregistered operators: fsa.go.jp/ordinary/chuui/highrisk.html
• FSA list "Names of operators conducting crypto-asset exchange business without registration" (PDF): fsa.go.jp/policy/virtual_currency/angoushisan_mutouroku.pdf

The consumer-protection gap

Because an unregistered venue is outside the domestic supervisory framework, the segregation rules, complaint routes, and oversight described under Path 1 are not assured. That is the factual trade-off — not a claim that any particular venue is good or bad, but a statement of what the regulatory framework does and does not cover. Checking the warning list is how you turn that abstract point into a concrete check on a specific operator.

Note also the tax dimension covered on the companion tax page: transactions on offshore or unregistered venues remain under comprehensive taxation, and are outside the scope of the proposed 2028 separate-taxation reform, which as drafted covers domestic registered venues only.

A decision checklist — factors, not a verdict

Rather than tell you which path to pick, here are the factors that usually decide it. Weigh them against your own situation.

• What are you holding? A few long-term coins point differently than an actively traded book.
• How often do you trade? Frequent trading needs a venue; buy-and-hold can favor self-custody.
• Do you need leverage — and how much? Domestic venues cap individual crypto leverage at 2x; if that constraint matters to you, factor it in honestly (without treating higher leverage as inherently better).
• How will you handle tax reporting? Domestic venues integrate with JPY and Japanese reporting; offshore activity stays under comprehensive taxation and you own the record-keeping. See the forced-liquidation tax page for how disposals are taxed.
• How much security responsibility do you want? Self-custody maximizes control and maximizes your personal responsibility for security.
• Is the operator registered? For any exchange, this is the one binary, checkable fact — via search.fsa.go.jp for registered operators and the warning list for unregistered ones.

Primary sources

• FSA — register of licensed financial operators (search.fsa.go.jp)
• FSA — warning on unregistered operators (fsa.go.jp/ordinary/chuui/highrisk.html) and the list of unregistered crypto-asset exchange operators (fsa.go.jp/policy/virtual_currency/angoushisan_mutouroku.pdf)
• Japan crypto leverage cap (2x) — amended Financial Instruments and Exchange Act and JVCEA self-regulation (jvcea.or.jp)
• Bybit official announcement — "Service Changes for Japanese Residents" (why a destination decision is needed)

This page is a neutral, general-information map of options; it is not financial, legal, or tax advice and it recommends no specific service. Verify any operator's registration status yourself, and consult a qualified professional about your own circumstances.