Thu, Mar 22, 2018 – 11:33 PM
[TOKYO] A looming regulatory rebuke for one of the world’s largest cryptocurrency exchanges is giving Bitcoin investors the jitters.
The digital currency sank 4.4 per cent to US$8,506 on Thursday after Japan’s Financial Services Agency was said to be planning to tell Binance, the trading venue founded by Zhao Changpeng, to stop operating in the country without a license. Binance has several staff in Japan and has been expanding without official permission, a person familiar with the FSA’s plans said.
The news, first reported by Nikkei, adds to signs that governments around the world are stepping up scrutiny of cryptocurrencies amid worries that they’re facilitating everything from money laundering to tax evasion and fraud. Japan, one of the most active markets for digital assets globally, introduced a licensing system for virtual currency exchanges last year in an effort to improve oversight.
Binance told Bloomberg News in January that it was working to acquire a license in Japan, and Zhao said on Thursday that the exchange is “engaged in constructive dialogue” with the FSA and has “not received any mandates” from the regulator.
The FSA has been clamping down on cryptocurrency venues in the wake of a US$500 million theft from Japanese exchange Coincheck Inc in January. Last month, the regulator issued an administrative penalty against Macau-based Blockchain Laboratory Ltd for giving seminars and providing consultation services in Japan without a license. Earlier this month, it suspended several local venues for poor security measures.
Binance has consistently ranked as the world’s largest cryptocurrency exchange by volume since late last year, according to Coinmarketcap.com. It held the top volume ranking for the past 24 hours, trading about US$1.8 billion, the website shows.