Japan’s Financial Service Agency Issues Warning to Binance, Bitcoin Stumbles
Bitcoin and other cryptocurrencies corrected significantly on Thursday after Japan’s regulatory agency - The Financial Service Agency (FSA) - issued a warning to the Hong-Kong based cryptocurrency exchange Binance for operating in Japan without registration. This news was first reported by local publication Nikkei which also stated that if the crypto exchange fails to respond to the charges it might further face criminal charges from the agency.
However, Binance CEO Changpeng Zhao was quick enough to respond to this news and said that the exchange is currently holding talks with the FSA. However, Zhao criticized Nikkei to report some something very confidential even when the talks were underway and the final outcome was yet to be derived.
In his tweet, Zhao said: “Nikkei showed irresponsible journalism. We are in constructive dialogs with Japan FSA, and have not received any mandates. It does not make sense for JFSA to tell a newspaper before telling us, while we have an active dialog going on with them.”
Although the news turned out to be true later as one of the persons familiar with the FSA, who refused to be identified, told Bloomberg that the cryptocurrency exchange was warned by the agency because it was expanding its operations by appointing more staff without informing the agency.
The FSA has recently been quite active and has stepped up its scrutiny over the crypto exchanges operating in Japan after the biggest $500 million crypto hack reported by local exchange Coincheck, earlier this year. Soon after the news of the hank broke out, Coincheck suspended its operations and FSA raided the Coincheck offices.
During its investigation, the agency found some security lapses in storing digital assets which caused the hack to take place. The crypto exchange, however, returned all the investor’s money who were the victims of the hack. However, the FSA has stepped up security measures for the crypto exchange to be followed to make sure that the investor’s money remains safe and protected.
With Japan being a crypto-friendly nation a lot of exchanges from China, who banned crypto trading last year, have shifted their base to Japan. Recently, the FSA also held Blockchain Roundtable meeting with regulatory bodies from other countries like Singapore and Canada in order to discuss the possible risks and opportunities in the blockchain and cryptocurrency markets.
Another report by Bloomberg shows that Binance is considering to move to Malta and open an office in the European Island nation, said founder Zhao Changpeng during a recent interview in Hong-Kong.
Zhao said: “We are very confident we can announce a banking partnership there soon. Malta is very progressive when it comes to crypto and fintech.” Zhao further added that he is currently in talks with the local banks of Malta to open an account there, but did not provide the timeline for the same.