Bitcoin Suffers As Japanese Regulator Warns Crypto Exchange Binance

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Japan's Financial Services Agency or FSA has warned Hong Kong-based cryptocurrency exchange Binance for operating in Japan without a licence.

The FSA reportedly is planning to work with police to file criminal charges against Binance, which is believed to be one of the the world's biggest cryptocurrency exchange operators, if it fails to halt its Japan operations.

Responding to the warning, Zhao Changpeng, the founder of Binance, said that the exchange is engaged in constructive dialogue with the FSA, according to Bloomberg. Binance reportedly was working to acquire a license in Japan.

Bitcoin, the largest digital currency, was trading at $8,476.41, down 6.2 percent over the last 24 hours. Ethereum, the second biggest cryprocurrency, declined 7.8 percent to $524.64; and Ripple fell 7.7 percent to $0.64.

As per the agency, those investors using Binance's services are likely to suffer financial losses from thefts and fraud - something unrelated to market moves. Following the recent tightening of regulation activities in Japan on domestic crypto exchanges, many investors shifted to Binance, which charges relatively lower fees. The exchange is said to have failed to verify the identification of Japanese investors to the financial authority, which suspect that the company lacks effective measures to prevent money laundering.

Binance, founded in 2017, handles 120 currencies among around 6 million traders globally, both are said to be the largest in the world in terms of the numbers.

In Japan, the revised payment services law states that exchanges that are licensed by the FSA or awaiting their license only can offer virtual currency trading services in the country.

The Japanese Financial Watchdog's move is said to be in line with its supervisory efforts to crack down unregistered cryptocurrency exchanges following the $500 million theft from Japanese exchange Coincheck Inc. in January.

The FSA recently issued an administrative penalty against Blockchain Laboratory Ltd. for working without a license to give seminars and provide consultation services in the country.

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