Binance warned by Japanese officials to avoid Unlicensed operations
March 23, 2018 1:36 pm
Big Crypto Exchange undergoes the Regulatory trouble
A regulatory denial for one of the largest cryptocurrency exchanges is creating nervousness among Bitcoin investors.
Binance received a warning by Japan’s Financial Services Agency for operating cryptocurrency exchange services without the license in the country with Japanese residents through the internet, as stated on the agency’s website. Bitcoin dropped to as much as 4.5 percent after the Nikkei first reported the warning on Thursday, and was down 0.2 percent at 9:31 a.m. in Hong Kong on Friday.
Zhao Changpeng, the founder of Binance, was warned by Japanese officials due to the increasing number several staff in Japan without official permission.
The news appends to signs that governments around the world are stepping up scrutiny of cryptocurrencies among worries that they’re facilitating everything from money laundering to tax deception and fraud. Japan, one of the most volatile markets for digital assets globally, inaugurated a licensing system for virtual currency exchanges last year with an aim to improve oversight.
Binance told Bloomberg in January that it was acting to acquire a license in Japan, but the warning could hinder those efforts. Zhao said on Thursday that the exchange is “engaged in constructive dialogue” with the FSA. While Binance was founded in Hong Kong last year, Zhao has said that his company does not currently have a judicial headquarters anywhere in the world.
The FSA has been clamping down on cryptocurrency venues in the wake of a $500 million theft from Japanese exchange Coincheck Inc. in January. Last month, the regulator declared an official sentence against Macau-based Blockchain Laboratory Ltd. for giving seminars and providing consultation services in Japan without a license. Earlier this month, it rejected many local venues for poor security measures.
Binance has been consistently regarded as the world’s largest cryptocurrency exchange by volume since late last year, according to Coinmarketcap.com. It held the top volume ranking for the past 24 hours, trading about $1.6 billion, the website shows.