Japan’s top financial regulator has ordered one of the world’s biggest cryptocurrency exchanges to suspend its operations. The watchdog said Binance was breaking Japanese rules and isn’t properly registered.
The Financial Services Agency issued a formal warning to Binance on Friday, ordering it to suspend its services to Japanese residents with immediate effect. The agency said the Hong Kong-based exchange was violating Japan’s rules on fund settlement but it did not say whether it’s considering criminal charges.
Changpeng Zhao, Binance’s chief executive, said on Twitter that the exchange’s lawyers are working with the FSA to find a solution. “Protecting user interests is our top priority,” he added.
No need to worry. Some negative news often turn out to be positive in the long term. Chinese have a proverb for this. New (often better) opportunities always emerge during times of change.
— CZ (not giving crypto away) (@cz_binance) March 23, 2018
Founded less than a year ago, Binance has quickly become one of the world’s largest cryptocurrency exchanges. It recently moved its corporate registration to the Cayman Islands. According to Alexa 9 percent of the website’s traffic comes from Japan.
The country is Binance’s second-largest user base by geography but Changpeng said only 7 percent of its trading volume takes place there. “It’s not small, but nowhere close to majority,” he said to the Financial Times.
This isn’t the first time the FSA has targeted a cryptocurrency firm. Last month it issued several warnings to Blockchain Laboratory, which is based in Macau. The company pulled out of Japan following the warnings.
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