The Financial Services Agency of Japan (FSA) has moved to impose regulations on cryptocurrency markets there. Four cryptocurrency exchanges, including the well-known exchange Bybit, received a caution from the authority.
Bybit, a cryptocurrency exchange, has been told to adhere to Japanese regulatory standards and stop providing services to citizens of that country after receiving a warning from the FSA on its registration procedure. Regulators have been keeping an eye on Bybit for a while, while Canadian officials have also issued warnings.
The exchange has stopped accepting USD deposits from domestic and foreign users as of March 10 as it is not operational in the US. The notice was also sent to MEXC Global, Bitforex, and Bitget.
According to the report, the exchanges were “conducting crypto asset exchange business without registration” at the time the warning letter was sent, which was against the nation’s financial settlement regulations. The fourth-largest cryptocurrency exchange in the world by volume is operating illegally in Japan and providing crypto derivatives trading services that are against the law. A similar notice was issued to Bybit by the authorities in May 2021.
After a turbulent year for the markets in 2022, Japan has not cracked down on the industry as hard as some other bigger countries such as the U.S., despite working on new laws for the crypto and Web3 sectors. The FSA’s move comes in response to a recent attack on unregistered cryptocurrency trades in the country.
The Japanese government has been requesting that the U.S. and EU regulate the operations of these crypto-like banks. The officials in the government believe that the crypto market is large enough to merit examination on par with that of financial institutions.
The FSA enacted new rules in 2020 mandating that cryptocurrency exchanges register with the organisation and acquire a licence to function in Japan. Exchanges that do not abide by the FSA’s rules risk penalties and judicial consequences.
Such warnings from the regulators serve as a reminder of this increasing governmental attention that the market is facing in Japan and other nations. The dangers presented by uncontrolled cryptocurrency platforms, such as fraud, money laundering, and market manipulation, are raising concerns among regulators.