Cryptocurrency exchange Gate.io is leaving the Japanese market, according to a blog announcement from Gate.io. New account creation for Japanese residents was already suspended on July 23. The exchange said it would soon provide details on the complete service suspension timeline.
The Mt. Gox hack turned Japan into an early adopter of strict crypto exchange regulations, but there has been some progress in the regulatory approach over the past few years.
At the same time, the platform will undertake necessary changes to comply with Japanese laws, including removing Japanese language text. However, essential information will still be provided in Japanese during the support period to facilitate the transition for Japanese-speaking investors.
More Regulation Everywhere
The reason behind Gate.io’s exodus remains unclear. In its official statement, the exchange said it strived to comply with regulations and regretted having to exit the Japanese market.
“As one of the world’s leading cryptocurrency exchanges, we strive to comply with financial regulations in all regions in which we operate,” Gate.io stated.
While Gate.io claims commitment to regulations, it is not registered with Japan’s Financial Services Agency (FSA). FSA’s previous warnings against other exchanges could be the possible reason for their exit.
The Financial Services Agency (FSA) has issued warning letters to four cryptocurrency exchanges for operating in Japan without proper registration. These include Bybit, MEXC Global, Bitforex, and Bitget.
According to Japan’s financial watchdog, these exchanges have violated the country’s fund settlement laws. The regulator clarified that the current list of unregistered traders may not accurately represent the full scope of unregistered businesses.
Exchanges that do not comply with the FSA’s regulations may face fines and legal action. Bybit, one of the leading cryptocurrency exchanges, has not yet released an official statement on the FSA’s warning.
Gate.io is a cryptocurrency exchange established in late 2017, under the umbrella of Gate Technology. The exchange is certainly not the first and may not be the last to exit from a growing market. Binance has also exited or limited its services in several countries, including the UK, Germany, and Japan, due to regulatory pressures.
Japan has strict consumer protection laws for cryptocurrency exchanges, likely a result of the Mt. Gox hack. Following the collapse of Mt. Gox in 2014, the government established stringent guidelines for cryptocurrency operators, which has contributed to a stable regulatory environment.
Mt. Gox Money In The Market
After a decade, victims of the Mt. Gox hack have finally begun receiving reimbursements. The exchange’s trustee announced the start of the repayment process earlier this month.
While the Japanese authorities are taking steps to ensure proper oversight and mitigate risks associated with crypto-related operations like fraud, money laundering and market manipulation, they are also working to integrate digital assets into their financial system.
The Japanese government is moving closer to allowing venture capital firms and other investment funds to hold digital assets directly.
Bloomberg reported that Prime Minister Fumio Kishida’s administration has pushed for legislative changes to enable investment limited partnerships to acquire and hold crypto assets.
The proposal is part of a broader economic reform bill aimed at fostering new business creation and strategic domestic investment through tax incentives and financial support.
Major Japanese corporations, including Softbank and Sony, are actively entering the Web3 space through strategic investments and partnerships. In addition, Metaplanet, a public company often referred to as ‘Asia’s Microstrategy’ has also increased its Bitcoin holdings, with consistent purchases since earlier this year.
Meanwhile, the rise of non-fungible tokens (NFTs) has also gained traction in Japan, with regulatory guidelines clarifying their status. NFTs are not classified as securities under current laws if they do not confer profit-sharing rights to holders, thus allowing for a more flexible approach to digital art and collectibles.
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