After five years out of the Japanese market, the Binance crypto exchange has started the process of establishing a new fully regulated subsidiary in the country. The move follows the acquisition of regulated cryptocurrency platform Sakura Exchange Bitcoin (SEBC) in November 2022.
As part of the agreement, SEBC will cease its current services on May 31 and will reopen as Binance Japan in the coming weeks. Users of the global exchange platform in the country will have to register with the new entity. The migration will be available after August 1, 2023 and will include a new KYC identity verification process to meet local requirements.
Funds remaining in SEBC will be automatically converted to Japanese yen and transferred to users’ bank accounts starting in June, Binance previously reported.
With an increasingly tight regulatory landscape, the exchange’s strategy to expand its global reach has been to acquire local regulated entities. Binance made a similar move in Singapore in 2021, in Malaysia in 2022, and in Thailand more recently. In Japan, it closed its operations in 2018, after failing to obtain an independent license from local regulators.
According to a notice posted on its website, the exchange will not offer derivatives services in Japan. The global version of Binance will not accept new derivative accounts from users in the country.
In addition, residents of Japan using the global platform will not be able to increase or open new options positions as of June 9. Pending orders will be cancelled, and existing positions will need to be closed before June 23, the exchange reported. Binance Leveraged Tokens will not be available for trading or subscription.
“In the future, we plan to further enrich our service offering in Japan and will work closely with regulators to, to the extent possible, provide derivatives services in a fully compliant manner,” the company wrote.
Japan was one of the first countries to introduce cryptocurrency regulations. Local laws contributed to the rapid recovery of funds in February at FTX Japan, a subsidiary of bankrupt FTX. Japanese regulations require exchanges to separate customer funds from other assets.
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