【Complete Version】Overseas FX Regulations in 2026 | When Will Domestic Bank Transfers End? Exit Strategy and Prop Firms as the New Normal

December 18, 2025 Updated

“My overseas FX bank account has been frozen” “Bank transfers may no longer be available”

Since the enforcement of the revised Payment Services Act in June 2025, these voices of anxiety have been rapidly increasing on social media. In fact, there have been numerous reports of account freezes and usage restrictions from users of GMO Aozora Net Bank and PayPay Bank.

In short, overseas FX is not “a dying business,” but the “gray zone” that has lasted for years is certainly coming to an end.

This article will provide a thorough explanation of the reality of account freezes, the legal background, and the three choices that traders should take going forward. In particular, for beginners who are just starting to trade, we will show you the path with the lowest risk.

【Conclusion】Overseas FX is Not “a Dying Business” but the “End of the Gray Zone”

First, let me convey the conclusion of this article.

Overseas FX itself does not become illegal. The Financial Instruments and Exchange Act regulates “solicitation by unregistered brokers,” and there is no law that punishes traders for using overseas FX.

However, the environment where many traders have enjoyed “easy deposits and withdrawals through domestic bank transfers” is certainly coming to an end.

Shinjo-kun

What? So what should people who are using overseas FX do from now on?

Kaitai Sensei

There are three choices. Each has its own merits and demerits, so you need to choose based on your own situation.

3 Choices for the Future

Especially for beginners who are just starting to trade, I strongly recommend starting with ② Prop Firms. The reasons will be explained in detail later.

【Reality】Reasons Why Overseas FX Account Freezes Have Been Rapidly Increasing Since June 2025

Since late June 2025, posts containing the keyword “overseas FX account freeze” have been rapidly increasing on social media.

According to a survey by Myforex, over 200 posts were confirmed in the first week of June 27, 2025. Many of them expressed anxiety such as “Will my account be fine?” and “Will bank transfers no longer be available?”

Banks with Numerous Freeze Reports

In particular, reports of freezes and usage restrictions are notable for the following online banks:

These online banks were widely used by traders due to the ease of account opening and low transfer fees. However, their anti-money laundering measures have also been tightened, making remittances related to overseas FX more likely to be flagged as “suspicious transactions.”

What Happens if Your Account is Frozen?

Once an account is frozen, there can be serious consequences:

1. Cannot withdraw funds: If it’s the account for your salary deposit or utility bill payments, it directly impacts your life
2. Takes time to unfreeze: It can take 2 weeks to 2 months to get unfrozen after submitting ID and documents proving the purpose of remittances
3. May not get unfrozen: The bank may demand account closure if they judge that the transaction is inappropriate to continue

Shinjo-kun

Not being able to withdraw funds for 2 months… If the account with my salary deposit gets frozen, I won’t be able to live.

Kaitai Sensei

That’s why it’s a golden rule to separate the account used for overseas FX from your living account. But first, we need to understand the legal background behind the freezes.

【Legal Background】Understanding the “Three-Layer Structure” Behind Account Freezes

Account freezes are not caused by a single law. The three-layer structure of the Financial Instruments and Exchange Act, the revised Payment Services Act, and the AML/CFT Guidelines is working in a complex manner.

Layer 1: Financial Instruments and Exchange Act | Solicitation by Overseas FX Brokers Is Illegal

At the root of this issue is the Financial Instruments and Exchange Act.

Japan’s Financial Instruments and Exchange Act clearly states that it is illegal for a business operator, regardless of its location (domestic or overseas), to provide FX trading services to Japanese residents without registration with the Financial Services Agency.

The Financial Services Agency has been continuously issuing warnings since 2009 and publishing a list of unregistered brokers.

However, this gray zone does not protect traders. The fact that they are participating in an illegal transaction on the other party’s side is the root cause that triggers various risks.

Layer 2: Revised Payment Services Act (Enforced in June 2025) | Strengthening Regulations on Payment Processors

The revised Payment Services Act enforced in June 2025 is the direct trigger for the rapid increase in account freezes.

The core of this amendment is that it has clearly defined “cross-border payment processing” as a “foreign exchange transaction,” which was previously in the gray zone.

Traditionally, payment processors did not necessarily require a license to operate their business. However, after the amendment, the target service providers are required to register with the Financial Services Agency and comply with strict KYC (know-your-customer) and AML (anti-money laundering) measures.

Shinjo-kun

But even if the payment processors are regulated, doesn’t it have nothing to do with the traders?

Kaitai Sensei

No, it is closely related. This amendment does not directly order banks to freeze their customers’ accounts. However, the “risk score” of all transactions passing through payment processors has skyrocketed.

It is extremely unlikely that payment processors, whose business model is centered on providing services to brokers that the Financial Services Agency considers illegal, will be able to obtain a new license.

As a result, many payment processors will either withdraw or be viewed as “suspicious” by the compliance departments of banks.

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