Japan ’s Financial Services Agency (FSA) has officially mandated that Apple and Google withdraw five unauthorized cryptocurrency exchange apps from their platforms, reinforcing the nation’s dedication to regulatory adherence in the crypto realm.
The exchanges targeted include Bybit Fintech from Dubai, Singapore’s MEXC Global, and Bitget, along with LBank Exchange and KuCoin from Seychelles. While this request was submitted last week, Apple acted swiftly, purging the apps from its App Store on 6th February, thereby restricting downloads for Japanese users, as reported by Nikkei on 7th February.
Japan’s strategy towards cryptocurrency is notably more cautious compared to its Asian counterparts. Unlike Hong Kong, which has sanctioned spot Bitcoin and Ether exchange-traded funds (ETFs), Japanese regulators maintain their skepticism about the volatility and inherent risks associated with crypto ETFs.
Industry professionals argue that the FSA’s action does not signify a crackdown on retail cryptocurrency investments. Anndy Lian, a blockchain specialist, highlighted that the initiative is about establishing clear parameters for market engagement: “This isn’t about halting crypto investing. It’s about demarcating a boundary and asserting, ‘If you wish to engage in our market, you must adhere to our regulations.’”
Lian further pointed out that Japan has been at the forefront of digital asset regulation, emphasizing consumer protection and market fairness. This regulatory choice follows the FSA’s announcement of a new tax reform slated for 2025, which will classify crypto assets similarly to traditional financial instruments.
The rigorous regulatory climate in Japan does not imply an antagonistic position towards cryptocurrency; rather, it showcases a commitment to safeguarding investors and ensuring accountability. Lian stated, “Japan’s regulatory structure isn’t some random obstacle; it’s a protective measure intended to shield investors from turmoil, reminiscent of the Mt. Gox incident.”
The downfall of Mt. Gox, a once-prominent Bitcoin exchange, in 2014, resulted in losses exceeding $9.4 billion for more than 127,000 investors. Recently, in an important development for the sector, Mt. Gox commenced the distribution of Bitcoin to creditors, with 41.5% of the total owed amount being settled by 30th July 2024.