Japan’s Financial Services Agency Issues Warning Letters To 5 Unregistered Overseas Exchanges
Latest developments from the Japan Financial Services Agency release Warning against unregistered foreign exchange operations. It has issued warning letters to the following exchanges: KuCoin, bitcastle LLC, Bybit Fintech Limited, MEXC Global, Bitget Limited.
It is worth noting that in Japan, cryptocurrency exchange businesses need to register with the Financial Services Agency and the Financial Services Bureau. According to local news outlet CoinPost, the exchanges appear to have been providing services to Japanese users without authorization.
Unregistered businesses are not regulated by the Financial Services Agency and therefore cannot check that customer assets are properly segregated and are not protected by the authorities in the event of trouble or unforeseen circumstances. There is also a risk that they will not be able to enjoy asset protection or compensation under Japanese law.
Japan tightens cryptocurrency regulations
According to recent news, the Financial Services Agency is also preparing legislation to prevent domestic assets from being leaked overseas if a cryptocurrency exchange headquartered overseas goes bankrupt. The purpose of this move is to properly protect the assets of individual investors as there have been a series of cases of illegal leaks of cryptocurrencies.
Notably, under the new regulatory regime, cryptocurrency exchanges will not be allowed to transfer assets of Japanese residents to foreign entities in the event of a financial crisis in Japan. This is a measure taken to prevent local investors from suffering losses due to the bankruptcy of overseas exchanges.
Japan focuses on innovation and consumer protection
Japan’s regulatory framework is constantly evolving in response to emerging trends in the cryptocurrency space. Governments are exploring ways to regulate DeFi platforms without stifling innovation. Japan has also taken a forward-looking approach to regulating stablecoins, focusing on innovation and consumer protection.
Japan’s newly elected Prime Minister has also expressed a vision to strengthen the cryptocurrency ecosystem, which has raised expectations in the crypto community and heralds potential growth for the industry.
