Binance, a cryptocurrency trading site, may face a new confrontation with Japanese financial regulators. The Financial Services Agency (FSA) issued a warning to Binance on Friday, accusing the business of operating a crypto exchange without being registered in the nation.
A similar warning was given by the authorities to Bybit, a crypto derivatives trading platform, in May. According to the warning, Bybit’s activities were allowing Japanese traders to leverage the exchange, and the exchange was yet to register with the FSA.
After China banned crypto trading in 2017, Binance and many other Chinese exchanges relocated to Japan. Shortly after, the FSA made Japan the first jurisdiction to develop clear-cut crypto exchange rules, which included mandatory national registration and licensing for platforms looking to operate in the country, among other requirements.
While Huobi, a competitor of Binance, received the license in January 2019, Binance chose to re-locate to Malta in March 2018. Binance first revealed plans to exclude Japanese consumers in January 2020 ,saying,
Binance.com will phase out the service to Japanese residents. Therefore, in the future, we plan to gradually implement transaction restrictions for customers residing in Japan. We will contact you as soon as the details of the transaction restrictions are decided. At this stage, there are no transaction restrictions, and you can use all services as usual.
Planned cooperation with Japan-based digital asset exchange TaoTao also fell through in October, thus ending Binance’s re-entry into the country’s market. SBI, a Japanese financial services giant, eventually acquired TaoTao a few days after negotiations with Binance ended.
On Thursday, Zhao tweeted a letter of commendation from the United Kingdom’s South East Regional Organized Crime Unit, endorsing the exchange’s efforts in combating darknet narcotics vendors.
On the other hand, Binance stock token trading grabbed the attention of German and British securities regulators in April. Binance jurisdiction hopping was characterized by the Financial Action Task Force in September 2020 as suggestive of a crypto exchange seeking to dodge regulations.