Japanese Financial Services Agency has planned to supply a warning against Hong-Kong based Binance due to operating a cryptocurrency exchange in the country without a license. If Binance doesn’t halt its operations, it would have to face criminal charges.
Unregistered Binance in serious trouble
The Financial Services Agency of Japan is all set to issue a warning against Binance, as reported by the person with direct knowledge of the matter. The Hong-Kong based cryptocurrency exchange is one of the world’s biggest operator that is doing its business in Japan without being registered.
The financial watchdog of Japan believes that the investors of the company are susceptible to losses and if the exchange doesn’t stop its operations despite the warning, the agency will file a criminal complaint against them.
After getting attacked with the biggest hack of over $500 million, the regulators of the country have amped up their supervisory efforts over cryptocurrency trading. In its efforts to clamp down on unregistered operators, starting with creating a self-regulatory body at the beginning of March, now Japan is taking firmer decisions.
Also, read: Binance Bounty Plan to Prevent Hacking In Future
Failure to compliance could lead to criminal charges
With over 6 million traders worldwide, Binance boasts of an impressive figure while handling about 120 cryptocurrencies. Since its inception in 2017, a number of Japanese crypto investors have shifted towards this exchange from their domestic ones as it offers a relatively cheap service.
Reportedly, Binance is failing to verify the identification of Japanese investors when opening their accounts. Additionally, the agency suspects the exchange doesn’t have the required measures in order to prevent the money laundering. Apparently, the agency is so much annoyed that it plans to put the company’s name on its website with a detailed warning.
In case a complaint is filed, an investigation would be launched into the exchange. However, due to the reason that FSA lacks any authority in Hong Kong, the issue will arise in terms of returning the Japanese investors’ funds.
Paving the way towards a safe crypto environment
For an exchange to operate in Japan, it needs to acquire the license by FSA as per the country’s revised payment services law that went into force in April.
Though the exchanges that don’t have the license or who are awaiting their licenses aren’t allowed to operate, numerous exchanges are still operating resulting in the increase of fraudulent activities. However, these unlicensed exchanges don’t have the option to ask for legal help if any problems occur.
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I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.