Japan’s top financial regulator, the FSA, has issued a warning to the LBank Exchange for offering cryptocurrency transactions to Japanese residents without registration. Under Japanese law, all domestic exchanges must apply for FSA permits, a process that has deterred many major players from entering the market. Overseas firms that actively target Japanese residents must also either stop doing so or apply for permits. The FSA has previously warned exchanges like Binance to stop targeting Japanese customers or apply for a license, but has recently increased scrutiny on overseas platforms like Bybit, MEXC Global, Bitget, and Bitforex.
The FSA’s warning to LBank was issued on June 14, highlighting the platform’s lack of a verifiable address and identified CEO. Japanese crypto regulation is strict due to high-profile exchange hacks in the past, such as the Mt. Gox collapse and the Coincheck hack. Tokyo introduced comprehensive regulations for domestic exchanges following the Coincheck hack in 2018. LBank, headquartered in Indonesia with offices in multiple countries, including Japan, offers JPY pairings and claims to support 50+ fiat currencies. The FSA’s warning is part of its efforts to crack down on overseas exchanges targeting Japanese residents without proper registration.
The FSA’s warning to LBank follows a trend of increased scrutiny on overseas crypto exchanges by Japanese regulators. The FSA has previously requested that top exchanges either stop targeting Japanese customers or apply for licenses, with the latest warning targeting LBank for offering cryptocurrency transactions without registration. Tight regulations in Japan aim to protect investors from exchange hacks and fraud, as seen in the Mt. Gox and Coincheck incidents. LBank’s lack of a verifiable address and identified CEO raised concerns for the FSA, leading to the warning issued on June 14.
The FSA’s warning to LBank is part of a broader effort to regulate the cryptocurrency market in Japan and protect investors. Stringent laws require all domestic exchanges to apply for FSA permits, deterring many major players from entering the market. Overseas firms that target Japanese residents must also comply with these regulations or cease operations in the country. The FSA’s increased scrutiny on overseas platforms has led to warnings issued to exchanges like LBank, Bybit, MEXC Global, Bitget, and Bitforex for providing cryptocurrency trading to Japanese residents without registration.
The FSA’s warning to LBank, an overseas crypto exchange operating in Japan without registration, emphasizes the importance of complying with Japanese regulations. Tight regulations aim to prevent exchange hacks and fraudulent activities, protecting investors in the cryptocurrency market. Tokyo introduced comprehensive regulations after high-profile incidents like the Mt. Gox collapse and the Coincheck hack, prompting increased scrutiny on domestic and overseas exchanges by the FSA. LBank’s lack of proper registration and verifiable address raised red flags for the regulator, leading to the warning issued on June 14.
