Japanese Regulator Issues Warning to Bybit, MEXC, Bitget, and Bitforex for Unregistered Crypto Trading
On March 31, the Financial Services Agency (FSA) of Japan issued a warning to four overseas cryptocurrency exchanges for offering cryptocurrency trading without proper registration. The four exchanges – Bybit Fintech Limited, MEXC Global, Bitget Limited, and Bitforex Limited – were alerted for violating the administrative guidelines set forth by the agency.
Bitforex Limited is based in the Republic of Seychelles, while the other three exchanges are based in Singapore, but they offer services to Japanese residents through the internet. Among these exchanges, Bitget is currently ranked 6th and Bybit 7th in the 24-hour trading volume ranking, making them two of the largest exchanges in the world. Bybit is also highly used by Japanese traders and has a large market share in derivatives trading, ranking sixth in futures trading volume.
The FSA has been keeping a close eye on unregistered businesses following the cryptocurrency leak from Coincheck in 2018. In May 2021, Bybit was already warned that it was conducting an unregistered virtual currency exchange business, and it was already listed on the unregistered trader list. Binance, another major cryptocurrency exchange, also received a warning in 2021 for providing services to users in Japan without proper registration, which was the second warning to the exchange after 2018.
In November 2022, Binance entered Japan through the acquisition of Sakura Exchange Bitcoin Co., Ltd., which was already registered as a domestic business operator. This acquisition seems to have shortened the procedure and time required for the start of operations. However, new registration of users residing in Japan to the global version of Binance (Binance.com) has been suspended, and those who try to register from Japan will be blocked with the message “You are trying to access our service from a restricted jurisdiction.”
The FSA’s warning to these four exchanges serves as a reminder to cryptocurrency exchanges to comply with regulations set forth by regulatory agencies. With the increasing popularity of cryptocurrencies, governments around the world are working to ensure that they are regulated to protect investors and prevent illicit activities such as money laundering and terrorism financing. Cryptocurrency exchanges should prioritize compliance with regulatory guidelines to ensure that they can continue to provide their services to customers worldwide.
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