Japan’s Financial Services Agency (FSA) has issued a warning letter to several foreign cryptocurrency exchanges, including Bitget, Bybit, MEXC Global, and BitForex, among others, for conducting unregistered operations in the country.
These exchanges violated Japan’s fund settlement laws by conducting crypto asset exchange business without proper registration, according to the FSA.
The regulator clarified that the current list of unregistered traders may not accurately represent the current state of unregistered businesses.
The FSA has been cracking down on unregistered crypto exchanges in the country since introducing new regulations in 2020, requiring crypto exchanges to register with the agency and obtain a license to operate in Japan.
The FSA’s action highlights the increasing regulatory scrutiny that the cryptocurrency industry in Japan and other nations is facing. The risks associated with unregulated cryptocurrency exchanges, such as fraud, money laundering, and market manipulation, are a growing concern for regulators worldwide.
Although Japan is working on new regulations for the crypto and Web3 sectors, the country has not cracked down on the industry as hard as some other larger economies, such as the United States. The FSA has also issued a formal warning letter to Binance for operating without necessary permissions in 2021.
The warning issued by the Japanese FSA has prompted some exchanges to take action to comply with the country’s regulations. However, some exchanges, such as Bybit and MEXC, have yet to respond to the FSA’s warning.
In recent months, regulatory pressure on cryptocurrency exchanges has increased worldwide. Countries such as China, India, and Turkey have also cracked down on crypto exchanges, citing concerns over money laundering and other illicit activities.
In the United States, the Securities and Exchange Commission (SEC) has been cracking down on crypto exchanges, targeting those that do not comply with securities laws. The SEC has also delayed the approval of a Bitcoin ETF, citing concerns over market manipulation and other issues.
As the regulatory landscape for cryptocurrency exchanges continues to evolve, it is becoming increasingly important for exchanges to comply with local laws and regulations.
Failure to do so could result in fines, legal action, and reputational damage, which could ultimately harm the growth and adoption of the cryptocurrency industry as a whole.
Japan Warns Bybit
In conclusion, the warning issued by Japan’s FSA to several foreign cryptocurrency exchanges for conducting unregistered operations in the country highlights the growing regulatory scrutiny that the industry is facing worldwide. As more countries move to regulate the industry, it is becoming increasingly important for exchanges to comply with local laws and regulations to avoid legal action and reputational damage.