Japanese Regulators Warn Binance Exchange Is Operating Without A License

Investing, News, Regulation | March 23, 2018 By:

Japan’s Financial Services Agency (FSA) has warned the Binance exchange that it is operating without registration in the country.

Cryptocurrency exchanges are required to register with the government in Japan as a condition for operating. The FSA says 16 exchanges have complied since its March 7 deadline for registration. If the issue can’t be resolved, Binance could be prohibited from transacting business in the lucrative Japanese market, and it could set a precedent for other countries interested in restricting cryptocurrency trading.

Binance CEO Changpeng Zhao, who had denied any pending actions yesterday, now confirmed that the company has been warned.  “We received a simple letter from JFSA about an hour ago,” he tweeted. “Our lawyers alled JFSA immediately, and will find a solution. Protecting user interests is our top priority.”

A Bloomberg report quoted Zhao stating that the company tried to get a license in Japan, but then decided to remove its staff from its office in the county. It is not clear if that means it is not currently doing business in Japan.

The news marks the latest embarrassment for Binance, which was hacked earlier this month. Binance is offering $250,000 in Binance Coin (BNB) to anyone who can provide information that leads to the “legal arrest” of the criminals that attempted to hack the platform.

On March 7, Binance was hit by a coordinated phishing attack that was also thwarted by the company’s automatic risk management system. The hackers used the stolen credentials to log in and pumped the price of Viacoin, which saw its marketcap increase from $64 million to $159 million in just a few minutes. The plan was to sell at the top and quickly cash out in bitcoin before the scam could be stopped.

However, as withdrawals were already automatically disabled by Binance’s risk management system, none of the withdrawals successfully went out. Additionally, the Viacoins deposited by the hackers were also frozen. Not only did the hacker not steal any coins out, their own coins have also been withheld.