Japanese Regulator Hits Crypto Exchange LBank With Official Warning

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 16, 2024 19:30 EDT

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Japan’s top financial regulator has issued an official warning to the LBank Exchange as it looks to crack down on overseas crypto exchanges that target Japanese customers.

On June 14, the Financial Services Agency (FSA) issued a warning to the LBank Exchange for offering Japanese residents “cryptocurrency transactions without registration.”

Japanese Regulator to Exchange: Stop Targeting Japanese Citizens

Under Japanese law, all Japanese exchanges must apply for FSA-issued operating permits.

This long and painstaking process has put many big-hitting players off the Japanese market. It has also led many major players to exit the market in recent years.

The law also states that all overseas firms that actively target Japanese residents must either stop doing so or apply for FSA permits.

In previous years, the FSA has written to top exchanges such as Binance to request that they stop targeting Japanese customers or apply for a license.

However, as of last year, the FSA has stepped up its scrutiny of overseas platforms. In 2023, the FSA warned Bybit, MEXC Global, Bitget, and Bitforex that they were “providing cryptocurrency trading” to Japanese residents “without registration.”

In its warning, which it published online on June 16, the FSA wrote:

“We have issued a warning today regarding unregistered cryptocurrency exchange operators in accordance with the administrative guidelines on […] cryptocurrency exchange operator relations. [LBank has] conducted cryptocurrency exchange business with Japanese residents via the internet.”

The FSA raised questions about the platform, adding that LBank “lacks a verifiable address” and an “identified CEO.”

Exchange ‘Offers JPY Pairings’

Japanese crypto regulation is arguably stricter than many of its international counterparts. Several high-profile crypto exchange hacks have rocked the nation.

These include the Mt. Gox collapse of 2014 and the momentous 2018 hack on Coincheck.

The latter of these two hacks in particular drove Tokyo to create the world’s first comprehensive set of regulations policing domestic crypto exchanges.

Per its website, LBank is headquartered in Indonesia. It also claims to have offices in the United States, the UAE, the British Virgin Islands, Canada, Lithuania, and Australia.

The firm launched in 2015. And per the About section on its website (last updated two months ago), LBank “currently supports 50+ fiat currencies,” including the Japanese yen.