Cryptocurrency exchange Huobi Pro sent an email to users stating that it will suspend crypto trading services in Japan by July 2. Since the company is not registered with the Financial Services Agency (FSA), Huobi Pro has no other option but to close its doors for Japanese residents.
As per a money transaction law introduced in 2016 that tweaked the Payment Services Act and recognized bitcoin as a method of payment, all cryptocurrency exchanges offering their services in Japan are required to register with the FSA.
However, it remains unclear whether Huobi Pro was approached by the FSA over the issue of necessary registration. It is also unknown whether Huobi Pro has any plans to apply for registration with the FSA.
The exchange is not the first of its kind to run into trouble by the FSA. Earlier, this year, another exchange, Binance was also reprimanded FSA stating that, as a foreign entity, it was offering trading services to Japanese residents without a license. Binance confirmed at the time that its legal team was in dialogue with the agency.
At the moment, Japanese cryptocurrency market is undergoing a slew of stringent regulations, in the wake of the hack that took place at Coincheck, earlier this year.
Earlier this month the agency had approved 16 cryptocurrency exchanges’ applications and had rejected one exchange’s application. The exchange in question was, FSHO, which is a “quasi-operator” or a “deemed dealer” which means the organization can provide crypto services, till the time it receives its approval.
Meanwhile, two vice chairmen of Japan’s Virtual Currency Exchange Association (JVCEA), a self-regulatory body that was formed earlier this month, have resigned after their exchanges received business improvement orders from the FSA. JVCEA said.
“In response to the fact that vice chairmen of the association, Yuzo Kano and Hiroyuki Noriyuki, representative directors of Bitflyer Co. Ltd. and Bitbank Corporation, received business improvement orders concerning their virtual currency exchange businesses, we inform you that we have received resignation requests from both of the vice presidents on this date and have accepted them,”