Binance to Face Legal Action in Japan

Exchanges, Law and Regulation, News

The crypto-to-crypto exchange, Binance, may see criminal charges from Japan’s Financial Services Agency (FSA) if it does not stop all activity in the country. The Nikkei Asian Review paper has found that Binance may have to close its office in Japan if it does not take action.

The FSA has stated that since Binance has been operating without a registered license, it will need to halt its actions until it officially has one. If it does not, it will face serious legal pressure. Binance opened its Tokyo office just before the country had begun clamping down on cryptocurrency related behavior — Japan began to critically analyze cryptocurrency activity after its Coincheck exchange was hacked and $530 million worth of cryptocurrency stolen. One of the reasons for moving was to avoid strict regulations.

The FSA is concerned that Binance does not have the capabilities to place anti-money laundering protocols on their exchange, as they have been unable to identify some of the Japanese users who trade on the site. At the moment Binance does not require any verification documents for daily withdrawals of below the equivalent of 2 BTC.

In a response, Changpeng Zhao, CEO of Binance, announced in a Tweet that they are in ‘constructive dialogs with Japan FSA’ and that ‘Nikkei showed irresponsible journalism’ because of the way they approached the story. Binance’s office in Hong Kong will not be affected by this legal action, only the Japanese office.

After the news regarding the FSA, Binance’s proprietary token, BNB, fell by 10% from $10.91 to $9.79. The BNB token has the largest market cap out of all other ‘exchange-focused’ tokens such as KuCoin Shares and CryptopiaFeeShares. The Binance exchange itself also has the worlds highest daily trading volume for cryptocurrency at $1.7 billion. If Binance does not manage to acquire a license, it could halt the progress of the exchange and force the BNB coin to plummet.

Kai is a cryptocurrency copywriter and professional trader. He can often be found investigating various cryptocurrencies, whitepapers, and blockchain technologies. Kai has been a professional writer for 5+ years, and has invested in 50+ different coins and tokens. He also currently studies Law and Philosophy at university.

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