One of the most well-known bitcoin exchanges worldwide, Gate.io, has decided to terminate all services available in Japan. Effective July 22, this retreat signals a dramatic change in the operational scene of the exchange.
In an announcement Monday, the exchange revealed a compliance programme meant to help its Japanese clients migrate their assets to platforms in accordance with local laws.
The company said it aims to follow financial rules wherever it conducts business. Gate.io added that it regrets to notify its customers that it will be ending its services for Japan.
Image: ビットタイムズ
Gate.io: Navigating Regulatory Waters
Gate.io’s leaving Japan draws attention to the difficulties crypto exchanges have negotiating convoluted legal landscapes. Mostly under control by the Financial Services Agency (FSA), Japan has one of the toughest laws for bitcoin exchanges.
The Payment Services Act (PSA), passed in April 2017 and which acknowledges cryptocurrencies as legal property and mandates exchanges to register with the FSA, is the pillar of this approach.
Total crypto market cap at $2.3 trillion on the daily chart: TradingView.com
Strict anti-money laundering (AML) and counter-terrorism financing (CFT) rules included in this strong regulatory framework target to make the surroundings safer for bitcoin transactions. Furthermore, controlling bitcoin derivatives is the Financial Instruments and Exchange Act (FIEA), which sets more criteria on exchanges for consumer safety and cybersecurity.
Japan has stepped up its regulatory scrutiny recently in response to recent reports of security lapses and mounting investor protection issues. The FSA has strengthened its compliance criteria, which increases operational control for exchanges.
Image: Techopedia
Guaranteeing A Flawless Transition
Gate.io is starting a programme to help consumers move their crypto assets to compliant platforms in order to guarantee a seamless transition for them. This programme consists of removing from its website descriptions pertaining to Japanese users and the Japanese market as well as in providing thorough proposals for the suspension of services and transaction relocation.
Gate.io reassured its clients that all required actions will be done to follow Japanese law, including closely coordinating with authorities like the FSA. The Gate.io team indicated in their release that specifics of the suspension of services and the reaction and timeline for the relocation of transactions will be implemented in line with compliance demands from authorities and will be revealed quickly.
Featured image from Condé Nast Traveler, chart from TradingView