Key Takeaways:
On Monday, cryptocurrency exchange Gate.io announced that it will be terminating all services in Japan from July 22nd onwards. The trading platform has already stopped registering new accounts for Japanese customers.
Gate.io Terminates All Crypto Services In Japan. Helping Customers Move Funds To Other Platforms
The exchange has launched a legal compliance program to support clients seeking to move their balances from Gate.io to other platforms that comply with the country’s crypto regulations.
Gate.io will ensure customers can continue performing crypto-related transactions by complying with the country’s updated legal framework.
In a notice to clients, Gate.io said it would take all “necessary measures to comply with Japanese law”. This includes removing any marketing description related to Japanese users and the domestic market on its website.
The exchange will provide more details on the service termination and the schedule for transaction migration in the following days, which will be per requests from authorities such as Japan’s Financial Services Agency (FSA).
Gate.io will also clarify the types of services and cryptocurrencies that will continue to be available under the new rules and regulations.
Japan Imposes Tight Regulations On Crypto Platforms Following High-Profile Exploits
Japan has implemented the most stringent crypto regulation of any country, which is influenced by several high-profile exploits that have taken place on domestic crypto exchanges.
In recent months, regulators like the FSA have taken a rather strict approach to crypto regulation amid a broader framework seeking to provide more consumer protection. The new mandate requires all cryptocurrency exchanges operating in the country to be registered and approved by the FSA and the Finance Bureau. They must also obtain an FSA-issued operating license before providing their services to Japanese residents.
The law also bars international companies from marketing their services to Japanese residents without an FSA permit. Binance, the world’s largest crypto exchange by trading volume, was requested by authorities to either apply for a license to continue operating or exit the country altogether.
Last year, the Financial Service Agency (FSA) issued warnings to crypto exchanges Bybit, MEXC Global, Bitget, and Bitforex, stating they were breaking the law by providing services without registration. In June, the LBank exchange received a notice from the regulator for offering crypto-related services to Japanese residents without compliance.
However, the process of acquiring these registrations is lengthy, which has deterred many industry players from either entering the Japanese market or leading to the exit of several major platforms in recent years.
Japan’s Trouble With Crypto Exchange Hacks
Japan’s approach isn’t without reason. In 2014, Mt.Gox, the largest Bitcoin trading platform in the world at the time, suffered a massive hack that resulted in 850,000 BTC belonging to customers being stolen. The event led to years of legal battles, with Mt.Gox declaring bankruptcy and shutting down its operations.
It was just last month that the exchange’s trustee announced a plan to reimburse victims of the exploit from 10 years ago. Mt.Gox has agreed to settle its clients with $9.1 billion in Bitcoin and Bitcoin Cash (BCH). The trustee has already begun distributing the funds, bringing much-needed relief to customers.
Similarly, in 2018, there was an incident involving the Japanese crypto exchange platform Coincheck, from which hackers stole 526 million XEM tokens, worth $400 million. The exploit was dubbed one the largest financial thefts in history.
The collapse of crypto conman Sam Bankman-Fried’s FTX exchange also heavily impacted Japanese customers. The company’s local subsidiary, FTX Japan, had to be sold to raise funds to reimburse investors.
Gate.io is currently ranked 7th among cryptocurrency exchanges based on trading volume, with a reported trading volume of approximately $1.19 billion in the last 24 hours. The exchange offers a variety of crypto trading options, including spot, margin, options, futures, and derivatives. Gate.io supports 1,400 cryptocurrencies and over 2,500 trading pairs.
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