In a warning letter published on Friday, Japan’s Financial Services Agency (FSA) said that several foreign cryptocurrency exchanges, including Binance, Bybit, MEXC Global, and Bitget, have been conducting business in the country without proper registration. , violating the nation’s fund clearance laws.
According to the warning letter, the FSA stated that the listed exchanges had violated Japan’s fund settlement regulations by conducting cryptocurrency exchange business without proper registration. The regulator clarified that the current list of unregistered traders may not accurately represent the current state of unregistered business.
The FSA action follows a crackdown on unregistered cryptocurrency exchanges in the East Asian nation. In 2020, the FSA introduced new regulations that require exchanges to register with the agency and obtain a license to operate in Japan.
The fact that the FSA has warned Binance means that the cryptocurrency sector in Japan and other countries faces increased regulatory scrutiny.. The risks associated with unregulated cryptocurrency exchanges, such as fraud, money laundering, and market manipulation, are of increasing concern to regulators.
Although Japan is working on new regulations for the cryptocurrency and Web3 sectors, the country has not cracked down on the industry as harshly as other larger economies, such as the US.
Cryptocurrency exchange Binance and its founder, Changpeng Zhao, were recently sued by the United States Commodity Futures Trading Commission (CFTC) for violations of US regulations.
The FSA has also issued a formal warning letter to Binance for operating without the necessary permits in 2021.
Cointelegraph has reached out to Binance, Bybit, and MEXC for comment on the warning issued by the Japanese FSA, but has not received any response by press time.
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