Since the infamous CoinCheck hack occurred in Japan, the Financial Services Agency (FSA) has been stringently applying regulations to all other exchanges that operate within the country. Additionally, they have been meticulously investigating several native exchanges, which has led to some sanctions and closures.
One of the most recent victim’s of Japan’s regulations is the cryptocurrency exchange Blue Dream Japan, which was informed that it must cease all functions by June 10 after an on-site inspection was conducted by the FSA. Furthermore, Campfire (another Japanese exchange) has been flagged by the FSA, but they chose to withdraw their application to operate, stating: ‘In order to build a perfect service system in terms of customer asset protection and convenience, we decided that further review of the plan [to continue as an exchange] is necessary.’
Campfire is not the only exchange who chose to withdraw from the FSA application process— Raimu, Tokyo Gateway, Bit Station, Mr. Exchange, and Bitexpress also decided that the process was either not worth fully completing or decided that they were unable to complete it. Mr. Exchange, in particular, released a statement: ‘We are currently discussing procedures for smoothly returning customer assets,’ clearly expressing their desire to no longer function as an exchange in any capacity.
The most notable example of a crypto exchange clashing with Japan’s Financial Services Agency is Binance, who were warned that legal action would take place should they continue their business without getting approval. This eventually led to Binance moving their headquarters out of Japan entirely and into Malta. It is becoming apparent that the FSA is drawing cryptocurrency exchanges away from Japan and, therefore, stunting their growth in the country.
While the country is losing several of its exchanges, this does not mean that cryptocurrency has fully stagnated in Japan. It only means that there more significantly more hoops which need to be jumped through before an exchange can get approved.
On the upside, Japan does have two exciting cryptocurrency projects taking place— Yahoo is reportedly planning to open an exchange and Coincheck is soon to make a comeback under new management. While some of the FSA’s rules regarding exchanges are somewhat complex or unknown, it would appear that they are not entirely unreasonable considering how these two exchanges will still be up and running in the future.
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.