Japan’s Financial Services Agency (FSA) issued warnings to five offshore cryptocurrency exchanges accused of operating without legal registration.
Warnings to Crypto Exchanges
Japan’s FSA issued warnings to Bybit Fintech Limited, KuCoin, MEXC Global, Bitget Limited, and Bitcastle LLC, accusing them of operating in Japan without official registration, violating the country’s cryptocurrency legislation.
Japanese Legal Requirements
Operating without registration raises serious concerns. Japan’s legislative framework for cryptocurrencies requires exchanges to follow strict compliance standards to protect customers. The FSA highlighted that unregistered exchanges lack oversight, complicating proper operations. The lack of asset segregation is a key issue, as platforms may mix client funds with operating assets.
Consequences for Users
Users of unregistered platforms are denied legal protection. They lack recourse for compensation in disputes or unexpected situations like insolvency or security breaches. Their non-compliance exposes them to potential losses.
Under Japanese law, any company providing cryptocurrency trading services must register with the Japan FSA or a municipal financial bureau. This ensures that platforms operate under a stringent regulatory framework.
