Bybit, Bitget, BitForex, and MEXC Global are four crypto platforms labeled by the Japanese FSA.

Japan’s Financial Services Agency (FSA) has issued warning letters to four leading cryptocurrency platforms (Bitget, Bybit, MEXC Global, and BitForex), saying they failed to obtain proper registration.

Regulators warned in 2021 that Bybit had started offering services without obtaining the necessary licenses.

Latest warning from FSA

Japanese regulators insisted in a recent letter that the four companies violated the country’s funds settlement law by “carrying out crypto-asset trading business without registration.” It further noted that the number of unlicensed traders "is not necessarily indicative of the current status of unregistered businesses."

The tagged platforms are leaders in their fields, with a combined user base of over 21 million. It is worth mentioning that Bybit received a similar notice from the FSA in the spring of 2021.

At the time, the regulator outlined that the company was not authorized to offer its products and services in Japan, and the alert came as Bybit was conducting a marketing campaign targeting investors in the Land of the Rising Sun. Some, like Norbert Gehrke, founder of Tokyo Fintech, believe this could be one of the reasons regulators took action:

“This kind of public condemnation of operating an unregistered business has not happened for some time, so it can be assumed that the FSA has witnessed Bybit’s aggressive marketing to Japanese investors, which goes beyond presenting their website in Japanese and not blocking Japanese intellectual property Addresses of common violations.”

Some giants left Japan

Two of the largest cryptocurrency exchanges, Kraken and Coinbase, announced their exit from the country, citing unsatisfactory domestic market conditions. The former deregistered itself from the Financial Services Agency at the end of January and explained:

"Current market conditions in Japan, coupled with the weakening global cryptocurrency market, mean that there is currently no reason to further develop the resources required to develop our operations in Japan. As a result, Kraken will no longer serve Japanese customers through Payward Asia."

Coinbase warned Japanese customers to withdraw their cryptocurrency holdings by February 17, and those who failed to do so exchanged their funds for Japanese yen. Nana Murugesan, Vice President of Business Development and International at Coinbase said:

"Our decision to wind down the majority of our operations in Japan has resulted in the elimination of the majority of positions at our Japanese entities."

Unlike the aforementioned platforms, Binance strengthened its presence in the country last November by acquiring Sakura Exchange BitCoin (SEBC), a Japanese cryptocurrency organization regulated by the FSA.​