Binance, the leading cryptocurrency exchange and blockchain platform, has announced a significant transition for its Japan-based customers to a new locally compliant platform. Starting from 26 May 2023, residents of Japan are prohibited from creating new derivative accounts on the global platform.
Binance to Move Japanese Users
Under the plan announced by Binance, Japanese residents using the global platform will gradually transition to a dedicated local version developed to comply fully with Japanese regulations. This move marks a significant commitment to compliance and the evolution of the digital asset ecosystem in Japan.
The new platform will be available this summer, with the launch date and additional details to be released in the coming months. In the meantime, the existing services on the global platform will remain accessible until 30 November 2023 for Japanese residents.
“We are in the process of establishing a local exchange dedicated to local users to comply with all applicable laws in the country. Binance is committed to complying with the laws and regulations in the jurisdictions where it operates,” Binance commented in a recent statement.
According to Binance’s information, the migration process should be fully finalized by December 2023. The information was confirmed on Twitter by the exchange's CEO, Changpeng Zhao.
Binance kicks off transition to new platform in Japan https://t.co/vsQ2z3dLBc
— CZ 🔶 Binance (@cz_binance) May 27, 2023
Due to regulatory limitations, Binance ceased its local operations in Japan several years ago. However, last year it acquired Sakura Exchange BitCoin, a local exchange with Japanese authorizations, in order to facilitate its return to this significant market for digital assets. Finance Magnates reported at the end of April that Binance Japan would likely launch in June. The latest reports from the exchange confirm this information.
Binance re-enters Japan a few months after its international competitors, Coinbase and Kraken, decided to leave the local market, citing 'weak crypto prices' and 'market volatility.' Kraken's local subsidiary Payward Asia was deregistered from the Financial Services Agency in January 2023.
Binance Transition Process and Timelines
Transitioning to the new platform will involve a new identity verification process (KYC) starting from August, through November. Japanese residents will be able to use the global platform until the end of November, even after completing the KYC process.
The transition will be followed by a gradual restriction of global platform features for Japanese users, starting with the prohibition of opening new derivative accounts already in force. Trading in Options and Leveraged Tokens (BLVT) will cease on 23 June 2023, and futures leveraged will be limited to 10:1 from the same date.
“Binance Japan will not provide derivatives services at the initial stage to comply with local regulations. In the future, we plan to continue to enrich our service offerings in Japan and will work closely with regulators to possibly provide derivatives services in a fully compliant manner,” the company added.
The Binance Japan platform will initially offer spot trading for over 30 tokens, with the exact list to be confirmed. The platform will automatically transfer any permitted tokens for users who complete the KYC process, allowing them to start using the local platform from December 2023.
Resident users of Japan that possess unpermitted tokens are advised to convert them to permitted tokens or withdraw them through an external wallet. Any remaining unpermitted tokens will be automatically converted to BTC on 30 November 2023.
Regulatory Challenges
During the recent Financial Times' Crypto and Digital Assets Summit, Patrick Hillmann, the Chief Strategy Officer of Binance, revealed that the crypto exchange is seeking regulation in the United Kingdom to respond to the regulatory challenges it has faced in the United States.
In the past, Binance had encountered difficulties with the Financial Conduct Authority (FCA), the UK's financial market regulator, and even withdrew its registration requests along with other crypto companies.
Meanwhile, Binance has decided to close its operations in Canada, citing regulatory requirements related to stablecoins and investor limits as the reasons for its departure.
Nevertheless, the company has successfully established a new subsidiary on a different front. Gulf Binance, a joint venture between Binance and Gulf Innova, has obtained a digital asset operator license from Thailand's Ministry of Finance. Gulf Innova is a subsidiary of Gulf Energy Development, which oversees the firm's digital business.
