After a five-year absence from the Japanese market, Binance, a leading cryptocurrency exchange, has initiated the process of establishing a fully regulated subsidiary in the country. This move comes after Binance acquired Sakura Exchange Bitcoin (SEBC), a regulated crypto exchange, in November 2022.
As part of the acquisition, SEBC will cease its current services by May 31 and rebrand as Binance Japan in the upcoming weeks. Users in Japan who currently utilize Binance’s global platform will need to register with the new entity. The migration will be accessible from August 1, 2023, onwards and will include a new identity verification process to comply with local regulations.
Binance has adopted a strategy of acquiring locally-regulated entities to expand its global presence, given the increasingly stringent regulatory environment. Similar moves were made in Singapore in 2021, Malaysia in 2022, and Thailand most recently. In Japan, Binance ceased operations in 2018 after failing to obtain an independent license from local regulators.
A notice on Binance’s website clarifies that derivative services will not be offered in Japan. Furthermore, the global version of Binance will no longer accept new derivative accounts from Japanese users.
Residents in Japan using the global platform will also face limitations. They will be unable to increase or open new options positions after June 9, with pending orders being canceled. Existing positions must be closed before June 23. Binance Leveraged Tokens will be unavailable for trading or subscription.
Binance has expressed its commitment to working closely with regulators to potentially offer fully compliant derivative services in the future. The company aims to further enhance its service offerings in Japan.
Japan’s early adoption of cryptocurrency regulations has played a crucial role in facilitating the recovery of funds, as seen in the case of FTX Japan, a subsidiary of the now-bankrupted crypto exchange FTX. The country’s regulations mandate the segregation of client funds from other assets within crypto exchanges.
Binance’s transition to a regulated subsidiary in Japan marks a significant milestone in the company’s global expansion plans. By complying with local regulations and acquiring established entities, Binance aims to establish a strong presence in various markets while providing a compliant and secure platform for cryptocurrency trading.