After an absence of five years, cryptocurrency exchange Binance is making a comeback in the Japanese market. The company has initiated the process of establishing a new subsidiary that will operate under full regulation in the country. This development follows the exchange’s acquisition of Sakura Exchange Bitcoin (SEBC), a regulated cryptocurrency exchange, in November 2022.
Binance sets up new regulated subsidiary
As part of the deal, SEBC will cease its current services by May 31 and rebrand itself as Binance Japan in the coming weeks. Users who are currently utilizing the company’s global platform in Japan will be required to register with the new entity. The migration process is scheduled to begin after August 1, 2023, and will involve a new identity verification process (KYC) to comply with local regulatory requirements.
In terms of user funds, any remaining balances on the SEBC exchange will be automatically converted to Japanese yen and transferred to users’ bank accounts starting in June, as previously disclosed by the exchange.
Binance’s strategy for expanding its global reach has involved acquiring local regulated entities, and this move follows similar actions taken in Singapore in 2021, Malaysia in 2022, and Thailand most recently. In Japan, Binance had ceased operations in 2018 after failing to obtain an independent license from local regulators.
The company continues its expansion through acquisition strategy
Notably, Binance Japan will not offer derivative services, as stated in a notice on the company’s website. Furthermore, the global version of Binance will not accept new derivative accounts from users in Japan. For residents of Japan currently using the global platform, they will be unable to open new options positions or increase existing ones after June 9. Pending orders will be canceled, and users must close their existing positions before June 23. Binance Leveraged Tokens will also not be available for trade or subscription.
Binance has expressed its intention to continue expanding its service offerings in Japan and work closely with regulators to potentially provide derivatives services in full compliance with local regulations.
Japan has been at the forefront of cryptocurrency regulations, having introduced early legislation in the field. These regulations have proven valuable, as demonstrated by the swift recovery of funds in February at FTX Japan, a subsidiary of the now-bankrupt crypto exchange FTX. In accordance with Japanese laws, crypto exchanges are required to segregate client funds from other assets.
With its renewed focus on regulatory compliance and its establishment of Binance Japan, Binance aims to regain a strong foothold in the Japanese cryptocurrency market and provide a secure and compliant platform for local traders and investors.
