The exchange reportedly facilitated cryptocurrency transactions with Japanese residents through the internet, which is in direct violation of Japan’s regulatory framework. LBank is a centralized crypto exchange established in 2015 and registered in the British Virgin Islands. The platform supports 671 coins and 814 trading pairs.
In March 2023, the agency issued similar warnings to four other companies: Bybit, MEXC, Bitget, and Bitforex. These exchanges were also found to be offering crypto trading services to Japanese residents without registration. Despite their popularity, these platforms remain inaccessible to Japanese traders due to regulatory restrictions.
Crypto exchanges must register with the FSA and adhere to anti-money laundering (AML) and counter-financing of terrorism (CFT) guidelines in Japan. In addition, most cryptocurrencies are treated as assets, while initial coin offering (ICO) tokens are classified as type 2 securities, regulated under the Financial Instruments and Exchange Act (FIEA). Meanwhile, in the U.S., the regulatory framework is more fragmented and evolving.
The SEC has been proactive, treating many cryptocurrencies as securities and pursuing legal action against non-compliant crypto businesses. Both Japan and the U.S. are actively refining their regulatory policies, with Japan leading a structured and clear-cut approach while the U.S. navigates through ongoing legal and regulatory debates.