According to the January 15 announcement on the Japanese support website of Binance, it reveals that the exchange will start to restrict access to the Japanese residents at no specified date.
The said restriction will be implemented gradually along with the complete details to be released later. Currently, the exchange is normally operated since no restrictions are yet placed.
An excerpt from the announcement translates to, “At this stage, there are no restrictions on transactions, and all services are available as usual. If you have any questions or comments, please contact our customer support.”
Binance Lacks of a National Exchange License
Binance is considered the largest cryptocurrency exchange by volume in the world. During its years of operation in the crypto space, it has made a vast progress. Apart from that, it is also among the cleanest exchanges, making it part of the market’s top 10 exchanges.
In just a matter of three years, the exchange successfully became top performers in the market. That’s due to innovative decisions along with a utility token, which also helps it to acquire a massive growth in both its worth and utility.
Previously, Binance headquartered in Japan following its exit in China. Back in 2018, the exchange decided to move the operation to Malta after an official warning by the regulators in Japan because of its lack of national exchange license.
Huobi, a rival of Binance, secured its license in January 2019. Then, the Japanese firm LINE’s BitBox exchange obtained its license in September 2019.
Binance possibly face regulatory difficulties even it is not legally residing in Japan. Kraken, a crypto exchange, ceased to deliver its services to the Japanese residents back in April 2018. the exchange admitted that the rising cost of operations is potentially caused by licensing requirements.
Will Japan Hurt the Business?
Many would agree that Japan is not too kind when it comes to cryptocurrency exchange due to the fact that it provides sever restrictions. The Japan Financial Services Agency (FSA) plans to introduce a particular rule that will limit the leverage in crypto margin trading two times the traders’ deposits.
Based on the FSA’s statement, the new regulations are said to go a long way in fighting the cryptocurrency volatility in the crypto market. This will generally amount to huge financial losses.
Furthermore, if the Japanese government finally approved the new rule, many crypto exchange operators will experience high pressure in changing their business models to match the new regulations. As a result, a number of speculative traders might lose their interest in crypto market margin trading because of the reduced profit margins.
From the very start, regulatory conflicts have been affecting Binance. Today, Japan tends to change its position on crypto. The country implemented a few permissive regulations to improve the cryptocurrency growth as well as fully monitor the cryptocurrency exchanges.
However, the said benefits are not yet seen in the crypto industry.