The Japanese Financial Services Agency (FSA) has issued a warning that cryptocurrency exchange Binance operates in the country without a license and doesn’t have regulatory approval to operate in Japan.
In particular, the department notes that local users from Japan can still access the binance.com website and make trade transactions.
The Japanese financial regulator notes that Binance allows you to open accounts without providing credentials. In the event that Binance doesn’t apply for a license in Japan and continues to provide services to Japanese residents, the FSA considers itself entitled to initiate criminal proceedings against the company.
The corresponding document appeared on the official website of the department.
At the same time, the regulator didn’t indicate specific deadline by which the crypto exchange needs to make a decision.
FSA is committed to protecting traders
The Agency made this statement in order to protect investors and traders. The FSA issued a similar warning about Binance back in March 2018. However, CEO of Binance Changpeng Zhao explained that the marketplace had a “constructive dialogue” with the regulator on this issue. As for the new statement from the regulator, a Binance spokesman said that the exchange doesn’t conduct cryptocurrency transactions in Japan. And doesn’t attract local users.
In addition, due to political considerations, the exchange does not comment on issues related to interaction with regulatory bodies. A Binance spokesperson added that the exchange takes regulatory compliance across jurisdictions seriously. Binance is working hard to eliminate any regulatory risk. In April, the exchange hired former OCC director Brian Brooks as CEO of Binance’s US division.
In April 2021, the FSA announced the addition of FATF anti-money laundering and counter-terrorist financing provisions for local digital asset companies.
Recall that at the end of May 2021, the FSA issued a similar warning to the Bybit cryptocurrency exchange.
Let us also recall that in 2017, the FSA obliged cryptocurrency companies to properly register their activities with regulatory authorities in order to continue working in the country.
Activity of Binance is illegal?
It is unclear how the FSA statement will affect Binance’s activities. And whether the agency is going to make further claims to the exchange. This is not the first time that the exchange has been mentioned in the warnings of regulators. So, last year, the Malaysian Securities Commission (SC) also reported that the exchange operates in the country illegally and is not controlled by local regulators. Zhao previously said that his exchange doesn’t have an office in any country, since it operates in a decentralized manner.
Recall that in the spring, the US Commodity Futures Trading Commission (CFTC) began to investigate the activities of the trading platform. The CFTC suspects Binance of allowing US citizens to trade cryptocurrency derivatives, thereby violating the law. It is possible that, together, all these factors affect the reputation of the exchange. This month, Silvergate, a usually crypto-friendly bank, stopped serving Binance without giving a reason.
At the same time, according to CryptoCompare, Binance continues to lead the ranking of the largest crypto exchanges.