World's largest cryptocurrency exchange warned over Japan operations

 
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Binance, the Hong Kong-based cryptocurrency exchange, was issued a warning by the Japanese Financial Services Agency for operating without the proper registration, permission or licensing (Source: Getty)

Binance, the Hong Kong-based cryptocurrency exchange that is believed to be the largest in the world by volume, has been told it could face criminal charges if it continues operating in Japan without the proper registration, permission or licensing.

The Japanese Financial Services Agency issued the group a warning on Friday, which could lead to a criminal complaint if Binance does not comply with its regulations. Though the crypto exchange was in January reportedly trying to get the necessary licensing in Japan, Binance continued expanding there without permission.

The government agency cited concerns that Binance allowed people to open trading accounts without adequately confirming their identities.

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The Financial Services Agency is tasked with enforcing Japan’s Virtual Currency Act, which was introduced last year, and has cracked down on several cryptocurrency exchanges in recent months for violations ranging from inadequate security to money laundering.

Changpeng Zhao, the Binance founder and chief executive, tweeted about the controversy after Nikkei Asian Review broke the news and said that the company had an “active dialog” with the Financial Services Agency.

“We are in constructive dialog with Japan FSA, and have not received any mandates,” Zhao wrote. “We received a simple letter from JFSA about an hour ago. Our lawyers called JFSA immediately, and will find a solution. Protecting user interests is our top priority.”

Macau-based cryptocurrency operator Blockchain Laboratory received similar warnings from the Financial Services Agency last month about its failure to register with the government group, and halted it no longer operates in Japan.

Binance already moved its operation out of China last year and blocked all Chinese IPs due to new government regulations that required all exchanges to shut down.

Read more: World leaders to discuss cryptocurrency crackdown at this week's G20 summit

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