Binance Makes a Move on Japan
The move comes as Japan looks to adopt more web3-friendly policies and shows a generally friendlier approach to crypto. Additionally, “substantial potential for user growth” is cited as a key reason behind the exchange’s renewed interest in the land of the rising sun.
Asked about this move, a Binance spokesperson was quoted as saying that,
“It would be inappropriate to comment on any conversations with regulators.”
They added that the exchange is “committed to working with regulators and policymakers to shape policies that protect consumers, encourage innovation, and move our industry forward.”
The Financial Services Agency (FSA), Japan's crypto market regulator, declined to comment.
Turning crypto tides
The largest crypto exchange by trading volume had to exit Japan as it did not have the necessary permit to operate. More precisely, in 2018, Binance abandoned its plan to build a base in Japan, following inquiries from the securities regulator that subsequently led to a notice to stop operating in the country without a license.
Meanwhile, the FSA recently released a new series of financial administration policy recommendations, which speak of crypto in a much more positive tone than has lately been the case.
The news came as the Japanese government pivoted toward a pro-industry stance. As previously reported, Prime Minister Fumio Kishida has spoken in glowing terms about Web3, the metaverse, and non-fungible tokens (NFTs), all of which he thinks have the power to spur on the Japanese economy.
That said, just days ago, the FSA issued a renewed warning to the Japan Virtual Currency Exchange Association (JVCEA), the country's crypto exchanges self-regulatory body, about the full-scale implementation of FATF travel rules for cryptoassets. It also criticized the JVCEA, stating that it is dissatisfied with the entity’s speed in rolling out anti-money laundering (AML) rules, how the organization handles decision-making and communication, and how it handles delegating executive responsibilities.
On its part, the JVCEA said that it is working to meet up with the FSA's standards, but that it still faces challenges.
With the crypto waters turning friendlier in Japan, other foreign companies too are looking to enter its cryptocurrency market, and some do it through acquisitions: for example, earlier this year, Amber Group acquired DeCurret Inc., a crypto exchange that has operated in the country since 2018.
Meanwhile, contrary to Japan’s moves, other countries have been taking a stricter stance lately towards exchanges, as well as the industry in general. Binance too found itself on the regulatory radar in several jurisdictions, including the USA.
As reported in January, Reuters claimed that, whilst claiming that it welcomes regulatory oversight, Binance was acting against those same regulators. It claimed at the time that the exchange was withholding information from regulators, acted against its own compliance department’s recommendations, and maintained weak AML checks on its large customer base.
Binance denied the allegations, saying that it works with authorities.
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