LBank recently found itself in hot water with Japan’s financial watchdog for allegedly conducting transactions without proper registration. The Japanese Financial Services Agency (FSA) raised significant concerns about the exchange operating with an “unknown address” and “unknown representative,” highlighting issues of transparency and accountability.
This warning from the FSA is not the first time the agency has targeted crypto exchanges in the country. In March 2023, warnings were issued to Bybit, MEXC, Bitget, and Bitforex for offering crypto trading services to Japanese residents without proper registration. Despite the popularity of platforms like Bybit and Bitget globally, they remain inaccessible to Japanese traders due to regulatory restrictions.
In Japan, cryptocurrencies are recognized as legal property under the Payment Services Act (PSA). However, exchanges must register with the FSA and comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) guidelines. Most cryptocurrencies are treated as assets in Japan, with ICO tokens classified as type 2 securities under the Financial Instruments and Exchange Act (FIEA).
On the other hand, the U.S. regulatory landscape for cryptocurrencies is more fragmented and evolving. President Joe Biden’s administration has taken steps to evaluate the risks and benefits of cryptocurrencies, leading to increased regulatory enforcement. The SEC has been proactive in treating many cryptocurrencies as securities and taking legal action against non-compliant businesses.
Despite these differences, both Japan and the U.S. are actively refining their regulatory policies. Japan follows a structured and clear-cut approach, while the U.S. navigates ongoing legal and regulatory debates. The recent White House veto of a bill that would repeal a contentious bulletin from the SEC shows the challenges in regulating crypto assets in the U.S.
As the crypto industry continues to grow and evolve, regulatory compliance remains a key issue for exchanges around the world. Platforms like LBank must ensure they adhere to regulatory requirements to operate in different jurisdictions successfully. The ongoing efforts by regulators in Japan and the U.S. underscore the importance of following guidelines to maintain trust and transparency in the crypto market.