Business 23 March 2018

Erik Gibbs

Binance denies reports of Japan closure amid FSA crackdown

Cryptocurrency exchange Binance is about to be slapped on the wrist by Japan’s Financial Services Agency (FSA) and could be made to shut down, according to Japanese news outlet Nikkei. The warning supposedly came as a result of Binance operating in the country without a license, and was announced following the March 7 hack of the exchange. Binance’s CEO, Changpeng Zhao, has refuted the news that the company was contacted by the FSA.

On March 7, users began reporting odd activity with their Binance accounts. Once users began to report the activity, Binance disabled all withdrawals and began an investigation. While they first denied the hack, Binance executives finally admitted that there had been an attack, and reversed all of the unauthorized transactions.

The FSA recently launched a wave of inspections into cryptocurrency exchanges. The inspections follow a hack that occurred on Coincheck in January of this year. More than $723 million in tokens was stolen during that hack. In one instance, $123 million worth of Ripple was stolen in a single transaction. Coincheck, like Binance, is not registered with the FSA.

After the Nikkei article regarding the FSA action against Binance was published, Zhao took to Twitter to deny the allegations. He admonished the Japanese news outlet, saying, “Nikkei showed irresponsible journalism. We are in constructive dialogs with Japan FSA, and have not received any mandates. It does not make sense for JFSA to tell a newspaper before telling us, while we have an active dialog going on with them.”

Binance launched in July of last year after raising $15 million through its initial coin offering (ICO). It currently has the highest trading volume in the world with a market capitalization of around $1.3 billion. The company was originally located in China; however, but relocated to Japan when Chinese regulators began their crackdown on cryptocurrencies.

There has been no further information to confirm or refute the claims that Binance will be forced to shutter its operations in Japan. One Twitter user, Henno van Rensburg (@hennokun) seems to have someone on the inside, though. He tweeted that the rumor is at least partly true, with the exchange being asked to remove its Japanese language version of the site to discourage trading among Japanese enthusiasts. The news has certainly impacted trading. Across the board, with just a few exceptions, all cryptocurrencies have been trading down following yesterday’s minor climbs.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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