Binance, Exchanges

Why Is Binance Getting Shut Down?

Binance, one of the world’s largest cryptocurrency exchanges by trading volume, is getting shut down. The popular exchange announced today that it will be “winding down” its operations in Japan.

This is not the first time Binance has had to shutter its doors in a country. The Malta-based company was forced to leave China in 2017 and later Taiwan.

But this time, the situation is different.

Binance is not being pushed out of Japan by regulators. The exchange is voluntarily shutting down its Japanese operations after failing to gain a license from the country’s financial regulator, the Financial Services Agency (FSA).

Binance first entered the Japanese market in early 2018 through a partnership with a licensed Japanese forex broker. This allowed Binance to operate in the country without having to obtain a cryptocurrency exchange license from the FSA.

But that arrangement came to an end in March of this year when the FSA issued a warning to Binance that it needed to obtain a license or face penalties. Binance then stopped operating in Japan.

The FSA’s requirements for cryptocurrency exchanges are designed to protect investors and prevent money laundering. Binance has been unwilling to comply with these rules, which likely played a role in its decision to leave Japan.

Binance is not the only cryptocurrency exchange to pull out of Japan. In September of last year, another major exchange, Kraken, also announced that it was leaving the country due to “regulatory difficulties.”

It’s unclear what regulatory difficulties Kraken was facing, but it’s likely that they were similar to those faced by Binance. The FSA’s rules are designed to protect investors and prevent money laundering, both of which are legitimate concerns when it comes to cryptocurrency exchanges.

By failing to comply with these rules, Binance is putting itself at risk of being shut down by regulators in other countries where it operates. So far, Binance has been able to avoid this fate by moving its operations out of countries where it faces regulatory hurdles.

But it remains to be seen how long this can continue.

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