One of the major players in the crypto sector, Binanceis reportedly seeking a license to operate in Japan, four years after leaving the country, Bloomberg said, citing people familiar with the matter.
The move comes as Japan seeks to adopt more web3-friendly policies and demonstrates a generally more accommodating approach to the crypto sector. Additionally, โsubstantial user growth potentialโ is cited as a key reason behind the exchangeโs renewed interest in the land of the rising sun.
Asked about this possibility, a Binance spokesperson said that,
“It would be inappropriate to comment on conversations with regulators.”
He added that the exchange is “committed to working with regulators and policymakers to shape policies that protect consumers, encourage innovation and advance our industry.”
The Financial Services Agency (Financial Services Agency, FSA), the crypto market regulator in Japan, declined to comment.
Turnaround
The largest crypto exchange by trading volume had to leave Japan because it lacked the necessary permits to continue operating in the country. Specifically, in 2018, Binance abandoned plans to build a base in Japan, following investigations by the securities regulator that led to a cease and desist notice.
The FSA recently issued a new set of Financial Administration Policy Recommendations, which speak to crypto in a much more positive tone than has been the case lately.
This new development comes at a time when the Japanese government has shifted to a pro-industry stance. As previously stated, the Prime Minister Fumio Kishida spoke in glowing terms about Web3, metaverses and non-fungible tokens (NFTs), all of which he said have the power to boost the Japanese economy.
Mr. Kishida also expressed his intention to reform the laws governing how cryptocurrencies are taxed in Japan, especially in the case of companies that issue cryptocurrencies.
That said, just a few days ago, the FSA sent a new warning to the Japan Virtual Currency Exchange Association (JVCEA), the self-regulatory body for crypto exchanges in the country, regarding the implementation of the โTravel Rulesโ of the Financial Action Task Force (FATF) for cryptocurrencies. She also criticized the JVCEA over the entity’s slowness in rolling out anti-money laundering (AML) rules, the way the organization handles decision-making and communication, and the delegation of executive responsibilities.
For its part, the JVCEA said it was working to comply with FSA standards, but still faced challenges.
Other foreign companies are also seeking to enter the Japanese market, and some are doing so through acquisitions: for example, earlier this year, Amber Group acquired DeCurret Inc.a crypto exchange that has been operating in the country since 2018.
Meanwhile, unlike Japan’s moves, other countries have taken a tougher stance on exchanges, as well as the industry in general. Binance too has come under the scrutiny of regulators in several jurisdictions, including the United States.
As Reuters alleged in January, Binance was acting against regulators, while saying it welcomes regulatory oversight. The news agency claimed at the time that the exchange was withholding information from regulators, acting against recommendations from its own compliance department and maintaining weak anti-money laundering controls across its large customer base. .
Binance has denied these allegations.
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