Binance served warning by Japan’s FSA for operating without authorization
Crypto exchange giant Binance is the latest platform to receive a warning from regulators in Japan for operating in the country without a license.
Crypto trading platform Binance may once again be heading for a standoff with financial regulators in Japan.
On Friday, the Financial Services Agency (FSA) issued a warning to Binance, accusing the company of offering crypto exchange services in the country without registration. The agency also served a similar warning to crypto derivatives trading platform Bybit back in May.
After China banned crypto trading back in 2017, Binance, along with many other Chinese exchanges, moved to Japan.
Soon after, the FSA made Japan become the first jurisdiction to develop clear-cut crypto exchange rules, which, among other requirements, mandated compulsory national registration and licensing for platforms looking to operate in the country.
While exchanges such as Houbi complied with the FSA’s directives, Binance elected to move its operations to Malta in March 2018. As previously reported by Cointelegraph, Binance first announced plans to restrict customers from Japan back in January 2020.
Japan’s amended Payment Services Act, which went into effect in Q2 2020, also provided greater clarity for crypto exchanges in the country, albeit with more stringent regulatory provisions.
A planned partnership with Japan-based digital asset exchange TaoTao also fell through in October halting any reentry attempts for Binance into the country’s market. Japanese financial services giant SBI eventually acquired TaoTao a few days after ending negotiations with Binance.
A Binance spokesperson told Cointelegraph that the exchange, “does not currently hold exchange operations in Japan, nor do we actively solicit Japanese users,“ adding that it does not comment on regulatory matters. They said:
“What we can say is that we take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space.“
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The crypto exchange giant has come under scrutiny from regulatory agencies in several jurisdictions. The company reportedly came under investigation by both the United States Internal Revenue Service and the Department of Justice.
Binance stock token trading also drew attention from German and British securities watch-dogs back in April. In September 2020, the Financial Action Task Force characterized Binance’s jurisdiction hopping as being indicative of a crypto exchange looking to avoid regulations.
However, Binance CEO Changpeng Zhao has previously responded to allegations of unlawful activity, stating that the exchange complies with Know Your Customer and Anti-Money Laundering policies.
Tweeting on Thursday, Zhao published a letter of commendation from the United Kingdom’s South East Regional Organised Crime Unit praising the exchange’s efforts in the fight against darknet narcotics vendors.
Binance did not immediately respond to Cointelegraph’s request regarding the warning.