No, Binance is not legally permitted to operate in Japan as a cryptocurrency exchange. The Financial Services Agency (FSA) has not granted Binance a registration license under Japan’s Payment Services Act, rendering its services illegal for Japanese residents. Since 2020, the FSA has intensified scrutiny, requiring foreign exchanges to establish local subsidiaries and comply with strict anti-money laundering (AML) and customer protection protocols.
Key Regulations for Binance in Japan
- Registration Requirement: Under the Payment Services Act, all cryptocurrency exchanges must register with the FSA. Binance lacks this authorization, making its operations unauthorized.
- Local Subsidiary Mandate: Foreign exchanges must establish a Japanese entity with capital exceeding ¥10 million and appoint a local representative to oversee compliance.
- AML/KYC Enforcement: The FSA mandates rigorous AML and know-your-customer (KYC) procedures, including transaction monitoring and suspicious activity reporting, which Binance has not fully implemented in Japan.
The FSA’s 2023 amendments to the Act on Prevention of Transfer of Criminal Proceeds further tighten oversight, requiring exchanges to verify customer identities for withdrawals exceeding ¥1 million. Binance’s continued promotion in Japan, despite these restrictions, exposes it to legal risks, including potential fines or criminal charges under the Financial Instruments and Exchange Act.