Japan’s Financial Services Agency (FSA) issued a warning letter to four leading cryptocurrency platforms (Bitget, Bybit, MEXC Global, and BitForex) for failing to receive proper registration.
The watchdog alerted in 2021 that Bybit had started offering services without obtaining the necessary licenses.
The FSA’s Latest Warning
The Japanese regulator maintained in a recent letter that the four companies violated the nation’s fund settlement laws by “conducting crypto asset exchange business without registration.” It further stated that the number of unlicensed traders “does not necessarily indicate the current state of unregistered business.”
The flagged platforms are among the leaders in their field, collectively having over 21 million users. It is worth mentioning that Bybit received a similar notice from the FSA in the spring of 2021.
Back then, the watchdog outlined that the firm lacked authorization to offer its products and services in Japan. The alert came at a time when Bybit was in the midst of a marketing campaign that targeted investors in the Land of the Rising Sun. Some, like Norbert Gehrke – founder of Tokyo Fintech – assumed this could be one reason behind the regulator’s actions:
“Such public reprimand for running an unregistered business has not occurred for a while, so one is to assume that the FSA has witnessed aggressive marketing by Bybit to Japanese investors that goes beyond the common transgressions of presenting their website in Japanese and not blocking Japanese IP addresses.”
Some of the Giants Left Japan
Two of the largest cryptocurrency exchanges – Kraken and Coinbase – announced their departure from the country, citing the unsatisfactory condition of the domestic market. The former deregistered from the Financial Services Agency at the end of January and explained:
“Current market conditions in Japan, in combination with a weak crypto market globally, mean the resources needed to further grow our business in Japan aren’t justified at this time. As a result, Kraken will no longer service clients in Japan through Payward Asia.”
Coinbase warned Japanese customers to withdraw their crypto holdings until February 17. Those who failed to do so had their funds converted to JPY. Coinbase’s Vice President for business development and international – Nana Murugesan – said:
“We’ve decided to wind down the majority of our operations in Japan, which led to eliminating most of the roles in our Japan entity.”
Unlike the aforementioned platforms, Binance strengthened its presence in the country by purchasing Sakura Exchange BitCoin (SEBC) in November last year. The latter is a Japanese cryptocurrency organization supervised by the FSA.
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