Japan’s Financial Services Agency (FSA) has issued a warning letter to several foreign cryptocurrency exchanges, including Binance, Bybit, MEXC Global and Bitget, for conducting business in the country without proper registration, violating the nation’s fund settlement laws. The FSA stated that the listed exchanges had breached Japan’s fund settlement regulations by conducting crypto asset exchange business without proper registration.
This action by the FSA follows a crackdown on unregistered crypto exchanges in the East Asian nation. In 2020, the FSA introduced new regulations requiring crypto exchanges to register with the agency and obtain a license to operate in Japan. However, the regulator clarified that the current list of unregistered traders may not accurately represent the current state of unregistered businesses.
The warning issued to Binance is significant, as it signifies that the cryptocurrency industry in Japan and other nations is facing greater regulatory scrutiny. Unregulated cryptocurrency exchanges pose risks such as fraud, money laundering, and market manipulation, which are concerning regulators more and more.
Although Japan is working on new regulations for the crypto and Web3 sectors, the country has not cracked down on the industry as hard as some other larger economies, such as the United States. However, the FSA’s actions show that it is taking steps to ensure that the cryptocurrency industry in Japan operates within a regulated framework.
Binance, one of the world’s largest cryptocurrency exchanges, has been facing regulatory pressure in various countries. The U.S. Commodity Futures Trading Commission (CFTC) recently sued Binance and its founder, Changpeng Zhao, for regulatory violations. The FSA also issued a formal warning letter to Binance for operating without necessary permissions back in 2021.
In conclusion, the warning letter issued by Japan’s FSA to several foreign cryptocurrency exchanges, including Binance, signifies that the industry is facing greater regulatory scrutiny. As the cryptocurrency industry continues to grow, it is essential for regulators to take steps to ensure that it operates within a regulated framework to mitigate risks and protect investors.