Japan Targets Binance, 4 Other Crypto Exchanges As Bittrex Bows Out Of US Market

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(Kitco News) – The global crypto crackdown continues to unfold as Japan has become the latest country to crack down on its growing cryptocurrency industry by issuing warning letters to several foreign crypto exchanges informing them that they have been operating in the country without proper registration.

On Friday, Japan’s financial regulator, the Financial Service Agency (FSA), sent letters to several exchanges – including Binance, MEXC Global, Bybit, Bitforex and Bitget – warning them that their operations are violating the nation’s fund settlement regulations by facilitating the exchange of crypto assets without first completing the registration process.

The regulator also said the five exchanges are not the only non-compliant firms and their action “does not necessarily indicate the current state of unregistered business.”

The regulations in question were first introduced in 2020 and require all cryptocurrency exchanges to register with the agency and obtain a license to operate in Japan.

So far, Japan has not been as heavy-handed as some other countries in regulating its crypto industry, but that appears to be changing amid a global push from governments around the world to curb illegal use of cryptocurrency and establish a clear regulations. for private individuals and companies.

For example, the FSA issued its first formal warning letter to Binance and Bybit for operating without the necessary permits back in 2021, but the exchanges have yet to see any serious consequences for continuing operations.

The warning from Japan is just the latest in a growing list of Binance woes after US authorities sued the exchange and its founder Changpeng “CZ” Zhao for violating US securities laws.

Any exchange that does not comply with the FSA’s regulations and continues to operate without the correct registrations risks fines and legal action. This warning highlights the ever-increasing regulatory scrutiny that crypto exchanges and companies face in Japan and around the world.

Concerns about illegal activities such as money laundering, fraud, tax evasion and market manipulation have risen amid a deepening global banking crisis, and regulators are working to close loopholes in capital outflows and stop other illegal activities.

While many exchanges have chosen to cooperate with regulators in an effort to continue offering services in certain jurisdictions, others have chosen to close up shop and focus on more accommodating authorities. Both Coinbase and Kraken, two of the largest exchanges in the US, have closed their operations in Japan due to challenging market conditions and the need to cut expenses and refocus efforts.

On Friday, the cryptocurrency exchange Bittrex announced that it would leave the US market after nine years of operation as “it’s just not financially viable for [them] to continue to operate in the current US regulatory and economic environment.”

After discussing the nine-year journey, Richie Lai, CEO and co-founder of Bittrex, said, “Regulatory requirements are often unclear and enforced without appropriate discussion or input, resulting in an uneven competitive landscape… Operating in the US is not longer possible.and Bill, Rami and I will focus on helping Bittrex Global succeed outside of the US.

The withdrawal of Bittrex from the US market follows the country’s crackdown on crypto banking providers in the wake of the collapse of Silvergate Bank, Silicon Valley Bank and Signature Bank.