In yet another crackdown on cryptocurrency exchanges, the Japanese financial watchdog – The Financial Service Agency (FSA) has recently issued a fresh warning to Hong-Kong based cryptocurrency exchange Binance for operating in Japan without any sort of registration. The news first appeared on local news publication Nikkei who also said that if the crypto exchange fails to pay attention to the notice, the agency might consider filing a criminal complaint.
Soon after Nikkei reported this, Binance CEO Changpeng Zhao, in a tweet, said: “We are in constructive dialog[ue] with Japan FSA, and have not received any mandates.” However, Zhao also criticized Nikkei for “irresponsible journalism” and asked the publication not to be in a hurry and jump the guns while reporting.
Nikkei showed irresponsible journalism. We are in constructive dialogs with Japan FSA, and have not received any mandates. It does not make sense for JFSA to tell a newspaper before telling us, while we have an active dialog going on with them.
— CZ (not giving crypto away) (@cz_binance) March 22, 2018
Soon after the news was confirmed to be true with FSA issuing an official warning to the digital currency exchange for not having a license to operate in the country. A person familiar with FSA’s plans, who refused to be identified told Bloomberg that Binance received the warning because the crypto exchange had been expanding its operations in Japan by the inclusion of more staff without informing the agency.
Japan which has been one of the most crypto-friendly nations attracts a large number of foreign exchange operators, especially from China which has introduced a blanket ban on any sort of crypto activities, last year in September 2017. However, owing to increase participation of global investors in the market, the Japanese regulatory body started licensing crypto exchanges in the wake of increased scrutiny for illicit activities of tax evasion and money laundering.
Moreover, earlier this year, another major crypto hack worth $500 million and probably the largest in the history of cryptocurrencies, was reported by Japanese cryptocurrency exchange Coincheck. The FSA performed some thorough checks at the crypto exchange after which it was found that some security lapses from Coincheck have caused the casualty. However, the crypto exchange later returned the victimized investors their money to the best of their capacity.
Since then, the FSA has stepped up security measures with more stricter scrutiny to make sure that such incidents do not happen again in the future and that the investor’s money remains protected. With more foreign exchange operators recently establishing their base in Japan, the Financial Service Agency recently held talks with regulators and policymakers from Canada and Singapore to discuss the vulnerabilities associated with public blockchain.
Soon after this news, Bitcoin which was on a recovery early this week struggled to hold the $9000 level on Thursday and has now corrected by nearly 4% according to the data on CoinMarketCap. Earlier today, Bitcoin hit a low of $8415.39 and has minorly recovered by over $100 from there onwards. Currently, at the press time, Bitcoin is trading at $8540.10 with a marketcap over $144 billion and above $5 billion trading volumes.
All other cryptocurrencies on the indices followed Bitcoin with the top 20 slipping down by a minimum of 5%.
Binance has been ranked as the world’s largest cryptocurrency exchanges last year in terms of trading volumes as per the data by CoinMarketCap.