Binance reported to face warning from Japan’s financial regulators, CEO responds [UPDATED]
According to the Nikkei Asian Review, the financial regulators of Japan (FSA) may issue a warning against Binance, the world’s largest cryptocurrency exchange to stop their operations in the country.
Binance is an Hong Kong based exchange that had opened doors in July 2017. It had raised around $ 15 millionthrough an ICO. It’s one of the largest cryptocurrency exchange by daily volumes as compared to peers like Huobi, Okex etc. Some of the unique features of Binance at the time was the low brokerage fees. Another was the discount received from using the BNB token as a mode of trading between these currencies.
According to their sources, Binance is currently operating without a license in Japan. This makes the regulators believe that the investors in Binance would face heavy losses.
This comes after the wake of the Coincheck Hack after people had lost over $530 million dollars in XEM to a hack. The country known for their liberal policies towards cryptocurrencies was put in the back foot. The financial regulators now have stepped up the scrutiny on unregulated cryptocurrency exchanges to protect investors. The Coincheck hack also highlighted the need to have transparency about an exchange’s daily operations. This would ensure that the platform would be able to measure up to the highest possible standards for security, compliance etc.
Some key concerns that the Japanese regulators have with Binance is their failure to verify the identification of Japanese investors during account creation. They also believe that Binance doesnt have adequate anti money laundering systems because of the lack of KYC systems in place for investors.
[UPDATE] A response from Changpeng Zhao, CEO of Binance. They are in talks with the FSA for obtaining the license.
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.
— CZ (@cz_binance) March 22, 2018
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