Japanese regulatory authorities have issued an official warning to the cryptocurrency exchange LBank in an effort to crack down on overseas exchanges that target Japanese customers.
On June 14, the Financial Services Agency (FSA) issued a warning to LBank Exchange for providing cryptocurrency transactions to Japanese residents without proper registration. According to Japanese law, all exchanges in Japan must apply for operating permits issued by the FSA. This stringent process has deterred many major players from entering the Japanese market and has caused some to exit in recent years.
The FSA has also made it clear that overseas firms targeting Japanese residents must either cease operations in Japan or apply for FSA permits. In the past, the FSA has contacted top exchanges like Binance, requesting them to stop targeting Japanese customers or obtain a license. However, in the previous year, the FSA has increased its scrutiny of overseas platforms, warning Bybit, MEXC Global, Bitget, and Bitforex for providing cryptocurrency trading services to Japanese residents without proper registration.
In its online publication on June 16, the FSA raised concerns about LBank Exchange, noting that the platform lacks a verifiable address and an identified CEO.
Japanese cryptocurrency regulations are known to be stricter compared to other countries, given the history of high-profile exchange hacks in the nation like the Mt. Gox collapse in 2014 and the Coincheck hack in 2018. The latter incident prompted Tokyo to establish comprehensive regulations for domestic cryptocurrency exchanges.
According to its website, LBank Exchange is based in Indonesia with offices in various countries including the United States, the UAE, the British Virgin Islands, Canada, Lithuania, and Australia. The exchange, which was launched in 2015, claims to support over 50 fiat currencies, including the Japanese yen.
