Japanese Regulators Set to Warn Binance to Halt Operations: NikkeiMarch 23, 2018
Binance, the giant cryptocurrency exchange, will be warned by Japanese financial regulators to halt its operations in the country on pain of criminal charges, according to a report by the Nikkei Asian Review.
Binance moved its headquarters to Hong Kong and set up offices in Tokyo just before the Chinese government began cracking down on the cryptpcurrency industry in September 2017. Asked about the move in an interview with Bloomberg TV, Binance CEO Zhao Changpeng said: “we generally don’t like to go up against governments.”
Operating without a licence
Now, the Financial Services Agency (FSA) of Japan says that Binance has been operating in the country without a licence, which has been a legal requirement for cryptocurrency exchanges in Japan since April 2017.
According to the report, Binance has attracted a large number of Japanese customers with its relatively low fees and has irritated authorities by refusing to verify clients’ identities when they open accounts. Because the exchange handles a number of anonymous cryptocurrencies, authorities fear that the exchange does not have adequate controls in place to prevent illegal activity.
Binance was indeed the target of a major heist recently, but its automatic safety systems meant that the hackers were unable to get away with the money. This didn’t stop the exchange from putting out a $250,000 bounty for information leading to their arrests. In addition to that reward, the exchange has set aside $10 million specifically for such events in the future.
Binance is currently the biggest cryptocurrency exchange in the world, according to coinmarketcap.com, with a daily trading volume of almost $2 billion. Its short lifetime has been characterized by rapid and dramatic growth. It made over $7 million in profit only three months after launching and once said that it had taken on 240,000 new customers in the space of one hour, forcing it to temporarily close its registration page.
The exchange has over six million customers and handles over 100 different coins.
If the FSA does decide to take action against Binance, forcing it to return money to Japanese customers could be an issue as the Japanese watchdog has no authority in Hong Kong.
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