Japan’s Financial Services Agency (FSA) has issued a warning letter to a Singapore-based major cryptocurrency exchange, Bybit, alleging that it has been running unlicensed services in the country. The Japanese watchdog says the fifth-largest crypto derivatives exchange by trading volume has not registered before with the local authorities to provide digital asset services.
According to the warning, Bybit has allowed Japanese citizens to register on its platform and use the platform, despite its unregistered status with the FSA.
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“To the best of our knowledge, such public reprimand for running an unregistered business has not occurred for a while, so one is to assume that the FSA has witnessed aggressive marketing by Bybit to Japanese investors that goes beyond the common transgressions of presenting their website in Japanese (…) and not blocking Japanese IP addresses,” Norbert Gehrke, Founder and representative Director of tech hub Tokyo FinTech, said in response to the FSA’s warning notice against the crypto exchange.
He even compares the situation with another cryptocurrency exchange firm, Panama-based Deribit, which on the contrary, blocks Japan-based IP addresses from accessing its website. Also, the firm adds a disclaimer on its translated version of the website.
“The site has been translated from English. Any differences created in the translation has no legal effect. In case of any question, please refer to the official English version,” Deribit’s disclaimer says.
Recent Bybit Regulatory Issues
This is not the first regulatory-related tussle that Bybit has faced over the years. The Singapore-based crypto exchange had to suspend its operations for UK-based customers, citing the UK Financial Conduct Authority’s ban on all cryptocurrency derivatives trading.
As Finance Magnates reported, the FCA considers these crypto assets could not be reliably valued by retail investors due to the inherent nature of the underlying assets, market manipulation and volatility.
“This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here,” the UK financial watchdog stated at that time.