- Binance will provide comprehensive services to its Japanese users starting in August, as revealed by its CEO Changpeng Zhao during a conference in Tokyo on Tuesday.
- This development comes after Binance’s acquisition of Sakura Exchange BitCoin (SEBC) in an undisclosed agreement last November
- Japan’s Financial Services Agency (FSA) issued warnings to Binance in both 2018 and 2021, instructing the exchange not to operate without proper licensing
Binance, the leading cryptocurrency exchange in the market, is set to provide comprehensive services to its Japanese users starting in August, as revealed by its CEO Changpeng Zhao during a conference in Tokyo on Tuesday.
This development comes after Binance’s acquisition of Sakura Exchange BitCoin (SEBC) in an undisclosed agreement last November. With this strategic move, Binance aims to expand its services and offerings to the Japanese market, solidifying its presence in the region.
Binance sets foot in Japan
Binance faced challenges before attaining this milestone. Japan’s Financial Services Agency (FSA) issued warnings to Binance in both 2018 and 2021, instructing the exchange not to operate without proper licensing. Despite Binance’s claims of engaging in constructive dialogues with regional officials, the FSA maintained that the company did not have the authorization to conduct business in Japan. As a result, Binance suspended all operations in the country, facing scrutiny from financial watchdogs.
However, in a surprising turn of events, Binance acquired Sakura Exchange BitCoin in November 2022, revealing its intentions to establish a foothold in the Japanese market. Sakura Exchange BitCoin, a regional digital asset platform governed by Japan’s FSA, became part of Binance’s global development strategy.
This strategic move aligns with Japan’s current push towards web3 innovation and the promotion of a local market for digital asset operators. Prime Minister Fumio Kishida’s “New Capitalism” policy framework recognizes the potential of cryptocurrencies and web3 technologies as engines for Japan’s economic growth. In a pre-recorded video address at the WebX conference in Tokyo, PM Kishida emphasized the importance of user protection measures and incentives to bolster the local web3 ecosystem, revealing a clear focus on supporting innovation in the digital asset space.
Binance acquires Sakura Exchange BitCoin
Binance’s acquisition of Sakura Exchange BitCoin has paved the way for the establishment of Binance Japan, a fully compliant platform in the country. With this new exchange, Binance will provide a diverse range of crypto and digital asset services to users in Japan, and this initiative has received favourable responses from the Japanese government. Prime Minister Fumio Kishida’s encouraging rhetoric indicates a supportive environment for crypto entrepreneurs to thrive in Japan, fostering the growth and development of the local digital currency ecosystem.
The crypto trade volume in Japan experienced a remarkable surge of 60% last month, compared to the beginning of 2023. With Binance poised to enter this thriving market, experts predict an even more substantial increase in trading volume, undoubtedly solidifying Japan’s position in the crypto world.
For Binance Japan users, some changes are on the horizon. Existing SEBC users will need to re-register with Binance Japan, starting from August 1, 2023, and undergo a revamped identity verification process compliant with Japanese regulations. Any remaining funds on SEBC will automatically convert to Japanese yen. The funds will then move to users’ respective bank accounts, as per Binance’s earlier announcement.
However, one notable omission from Binance Japan’s offerings is derivative services, meaning Japanese users won’t have access to these services on the global platform. Users in Japan had until June 9 to adjust or initiate new options positions, after which such actions were prohibited, and existing orders faced cancellation. Additionally, Binance Leveraged Tokens will not be listed for trade or subscription in Japan.
Binance vision for Japan
Binance outlined its future vision, expressing the intention to expand services in Japan in collaboration with local regulatory bodies. The company aims to potentially introduce derivative services in compliance with the law as it continues its journey in the Japanese market.
Japan has solidified its position as a major player in the global cryptocurrency market, necessitating the need to address potential risks associated with the industry. Recently, the Japanese government announced its intention to enforce stringent new Anti-Money Laundering (AML) measures across the crypto sector.
As a member state of the G7, Japan will also play a pivotal role in enforcing the “Travel Rule” established by the international financial watchdog, Financial Action Task Force (FATF). Discussed extensively at the recent G7 summit hosted in Japan, the “Travel Rule” mandates that financial institutions handling crypto transfers over $3,000 disclose customer information to the recipient exchange or institution.
Furthermore, Japan’s new regulatory framework mandates that crypto exchanges registered in the country conduct thorough customer identity verification and maintain detailed transaction records in compliance with AML standards. The country’s Financial Services Agency (FSA) will take charge of overseeing compliance with this robust new regulatory framework.