Initially,
as reported by Coinpost, Japan’s Financial Services Agency (FSA) pointed out
that the cryptocurrency exchange was registered with an “unknown address” and
an “unknown representative,” which theoretically safeguarded the exchange but cast
doubts over their solidity.
According
to the news agency CoinPost, the Japanese Financial Services Agency on June 14
sent a warning to the offshore exchange LBank Exchange stating that it was not
registered to launch cryptocurrency transactions. It also warned Bybit, MEXC,
Bitget and Bitforex in March last year while obtaining information on two
entities under its new powers. …
https://twitter.
com/ Wu Blockchain/status/1262547258890520064?s=20 — Wu Blockchain
(@WuBlockchain) June 15, 2024
It was
said that the exchange focused on providing residents of Japan with such
services as exchanging cryptocurrencies for other cryptocurrencies through the
Internet, which directly violates the legislation of the country.
LBank is
a centralized crypto exchange that was founded in 2015 and it is situated in
Britain Viable Island. Currently, the platform provides the trading of 671
coins and 814 trading pairs. According to Cryptocurrency market trackers at
Coin Gecko, LBank is now occupying the position of 55 dependent on 24 hour spot
trading volume.
The
alert to the crypto exchange was issued shortly after the exchange sponsored a
meeting of popular global web3 investors in Dubai, also showing the lack of
coordination between embracing global promotion campaigns and adhering to
regulation guidelines.
Historical
warnings
This
latest warning to LBank is not the first case where Japan’s FSA has pointed a
finger of blame at crypto exchanges doing business within its borders. In March
2023, the agency issued similar warnings to four other companies: Some of the
exchanges that I found to be popular and active in this trading are Bybit,
MEXC, Bitget, and Bitforex. The same were discovered to be operating as crypto
trading facilities among residents of Japan without proper registration.
According
to the market data provided by CoinGecko, both Bitget and Bybit are among the
leading crypto exchanges in the world with the former having garnered over 21
million visits in the last month while the latter has attracted about 20
million visitors in the last 30 days.
Crypto
exchange rankings by monthly visits | Source: Predictors consist of Changelly,
ShapeShift, Crex24, Bittrex, Poloniex, BitZ, Lyd, SouthXchange, Okcoin
International, and CoinGecko.
Derivatives
trading is also heavily practiced on Bybit while the exchange has a big
following of users from Japan. The reason is that these platforms remain
unavailable for use by Japanese traders owing to a limitation of their
jurisdiction.
Comparing
regulatory landscapes
Japan
firmly stands for the regulation of cryptocurrencies and has a developed
legislation to control them, while the U. S. examines the possibilities of
legislation and has more freedom for experiment. Regarding the financial
regulation, Japan has adopted the Payment Services Act (PSA) that refers to
cryptocurrencies as legal property.
Nonetheless,
all the crypto exchanges have to get themselves needed registered with the FSA
also has placed tighter rules regarding the anti-money laundering (AML) and the
counter-financing of terrorism (CFT).
In
addition, concerning the classification of cryptocurrencies, most
cryptocurrencies are regarded as commodities in Japan, whereas ICO tokens are
deemed type 2 financial instruments that fall under the FIEA.
However,
the U. S. has a more complex, patchwork approach to regulation that is
currently in a state of development. During Biden’s presidency in 2022, his
administration implemented measures to assess the strengths and challenges of
digital currencies, including the signing an executive order that paved way for
the development of a comprehensive framework of tightening the regulations.
But, in
recent time, the White House, the president of the United States dismissed a
bill by the house of representatives which sought to repeal a rather sensitive
bulletin by the U. S Securities and Exchange Commission, SEC which many
legislatures believed could pose as a major hurdle to companies offering
custodian services for cryptocurrencies.
For
example, the SEC has not waited and has acted aggressively, regarding many
cryptocurrencies as securities and initiating legal prosecution of
non-compliant cryptocurrency companies. One of the significant achievements was
the 2023 court ruling which stated that ripple sold XRP as securities in one
instance only that was to institutional investors not on individual exchanges
which was the legal victory for the cryptocurrency industry.
Japan
and the U. S. are both currently in the process of fine-tuning their respective
regulatory policies, albeit at different levels of formality; Japan has a
highly organized and easily defined format in which to base its policies upon
while the future of the U. S. regulatory framework continues to undergo heated
legal proceedings.
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