Japan's cryptocurrency regulatory environment is one of the most stringent in the world. Recently, a leading exchange ranked high in global volume announced that it will restrict platform usage for Japanese residents starting next year in order to comply with Japanese financial regulations.

The exchange has not yet provided detailed information on which specific functions and services will be affected, but it has stated that these measures will be gradually implemented, and affected users will receive further notifications.

Why is the regulation in Japan so strict? To put it bluntly, any exchange that wants to operate in Japan must go through the strict review and registration process of the Financial Services Agency (FSA). Customer protection, asset segregation, anti-money laundering... none of these regulations can be omitted. Non-compliance? Then you can only roll out of the market.

What's even harsher is that Japanese regulatory authorities are now tightening their grip. They are working on new regulations that require local exchanges to allocate a "responsibility reserve fund." This fund acts as a protective shield for users' assets—should a hacker attack or operational error occur, this reserve can be utilized to ensure that users' funds do not go to waste.

Under this set of "non-compliance means exit" game rules, those offshore platforms that cannot meet the standards will ultimately have no choice but to exit quietly.