Several foreign cryptocurrency exchanges, including Bybit, MEXC Global and Bitget, have been operating in the country without proper registration, Japan's Financial Services Agency (FSA) said in a warning letter published on Friday. violated the country's settlement of funds law.
According to the warning letter, the FSA said that the listed exchange violated Japan’s fund settlement regulations by conducting crypto asset trading business without proper registration. The regulator clarified that the current list of unregistered traders may not accurately represent the current status of unregistered businesses. The FSA's action comes after the East Asian country cracked down on unregistered cryptocurrency exchanges. In 2020, the FSA introduced new regulations requiring cryptocurrency exchanges to register with the agency and obtain a license to operate in Japan.
The FSA’s warning to cryptocurrency exchanges means the industry in Japan and other countries is facing heightened regulatory scrutiny. Risks associated with unregulated cryptocurrency trading, such as fraud, money laundering and market manipulation, are gaining increasing attention from regulators. Although Japan is developing new regulations for the cryptocurrency and Web3 industry, the country has not cracked down on the industry like some other larger economies such as the United States.
Back in 2021, the FSA also issued a formal warning letter to Binance for operating without the necessary licenses.
