Author: Bitcoin.comNews

The Japan Financial Services Agency (FSA), Japan’s financial regulator, It was announced on November 29 that warning letters had been issued to five cryptocurrency exchanges accused of operating without registration. The five crypto exchanges are Bitcastle LLC, Bitget Limited, Bybit Fintech Limited, Kucoin and MEXC Global.

According to Coinpost, crypto exchanges targeting Japanese residents must register with the FSA or Financial Services Bureau. The regulator said it cannot oversee unregistered crypto trading platforms and therefore cannot confirm whether they are properly segregating customer assets.

The FSA said this lack of regulation could result in authorities being unable to help injured users in disputes or unexpected situations. The regulator also warned that Japanese residents using these unregistered exchanges may not receive asset protection or compensation under Japanese law.

By issuing the warning letter, Japanese regulators join counterparts in France and Hong Kong who have also targeted unlicensed crypto trading platforms. French regulators have gone a step further, urging residents to take precautions when transacting with such platforms. In Hong Kong, the Securities and Futures Commission has threatened legal action against entities operating illegally in the territory.

FSA's warning comes as Japan seeks to establish a leadership position in the Web3 field. For example, People’s Democratic Party leader Yuichiro Tamaki has advocated for tax and regulatory reforms on crypto assets in media reports. As a recent report from Bitcoin.com News stated, Tamaki’s party proposed a separate 20% tax on crypto assets.

As of this writing, none of the five exchanges has issued a statement regarding the FSA’s warning letter.