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Japan regulator warns cryptocurrency exchange over unregistered operations

By REUTERS
March 24, 2018

TOKYO: Japan´s financial watchdog on Friday issued a warning to Hong Kong-based cryptocurrency exchange Binance for operating without registration, the latest move by regulators

to tighten standards in the country´s digital money industry.

The Financial Services Agency (FSA) said in statement that it had issued the warning to Binance, one of the world´s biggest cryptocurrency exchanges, for engaging in business with Japanese residents via the internet despite lacking permission to do so.

The regulator said Binance likely allowed Japanese residents to open accounts without confirming their identities, adding that the exchange would face criminal charges if it continued to do business without a licence.

An official of the Financial Services Agency told Reuters it had not given the exchange any particular deadline to cease its operations.

Binance Chief Executive Changpeng Zhao said on Twitter the exchange was told of the warning on Friday morning, and was engaging with the watchdog.

"Our lawyers called Japan Financial Services Agency immediately, and will find a solution," he wrote, referring to the regulator.

"Protecting user interests is our top priority." Binance did not immediately respond to a request for additional comment.

Last year, Japan became the first country in the world to regulate the cryptocurrency industry, requiring all exchanges to register with the authorities in an effort to bolster consumer protection and clamp down on illegal uses of digital money.

The warning against the Hong Kong exchange marked further steps by the Financial Services Agency to shore up consumer protection in the wake of the $530 million theft of digital money from Tokyo-based Coincheck Inc in January.

In February, it issued a warning to Macau-based Blockchain Laboratory for operating without registration.

The watchdog also recently punished seven cryptocurrency exchanges already registered or

awaiting registration over issues ranging from lax security to poor controls on money laundering.