The cryptosphere was thrown into a frenzy yesterday following news that Binance was facing regulation trouble in Japan. While Binance CEO Changpeng Zhao was quick to refute rumors on Twitter, reports turned out to be true. Today, Binance officially received a warning from Japan’s Financial Services Agency (FSA) for operating without a license.
Market loses previous gains
After a brief bullish run, the market’s top cryptocurrencies suddenly found themselves in the red. Bitcoin dropped approximately 3.5%, with many altcoins losing upwards of 4%. Many attributed this change to news reports stating that the FSA was allegedly planning to issue a formal warning to Binance due to lack of registration with the financial regulator. According to local news outlet Nikkei, the FSA was considering weighing criminal charges against the exchange if it continued to operate without the necessary registration.
When news of the warning broke out, Zhao assured users there was no conflict between Binance and the FSA, calling Nikkei’s report a case of “irresponsible journalism.” However, several hours ago, Zhao confirmed that Binance has now received a “simple letter” from the FSA.
In a subsequent tweet, Chao once again allayed users’ fears, stating there was no need to worry as “new (often better) opportunities always emerge during times of change.”
Binance praised for transparency
This is not the first time Binance finds itself at the center of controversy. A server shutdown in February led many, such as John McAfee, to suspect Binance of covering up a hack. Using his Twitter account, Zhao kept users informed of all updates, reassuring users that rumors were false. A few weeks ago, the exchange was the victim of an unsuccessful hack. In response, Binance offered a $250,000 reward to help catch the culprits. In each situation, Binance has shown quick action and a unique transparency that have won the favor of many users.
The search for regulation-friendly countries
Binance moved to Japan after increasing regulatory crackdowns in China forced the exchange to seek another home base. After receiving JSA’s warning, Binance has announced it will be moving to Malta, which hopes to become the “Silicon Valley of Crypto.” The mediterranean country is not the only one planning to become a safe haven for cryptocurrency. Last week, France wrote of legislation that would help make it the capital of initial coin offerings (ICOs).
It appears an increasing number of countries are embracing the cryptocurrency movement, indicating that adoption could come much sooner than anticipated. Binance’s example shows that open dialogue between exchanges, regulators, and governments is not only encouraged, but necessary in order to achieve this goal.
