Markets
Gate.io to Shift Japanese Customers to Compliant Crypto Exchanges as It Exits Market
Centralized cryptocurrency exchange Gate.io announced on Monday its intention to withdraw from the Japanese market, alluding to its efforts to comply with domestic regulations.
The exchange will stop accepting new account registrations from Japanese residents and begin a gradual cessation of services for existing users, it said in a declaration.
“We are committed to complying with financial regulations in all regions where we operate,” according to a rough translation from Google. “In accordance with this commitment, we regret to inform you that we will be discontinuing our services to Japan.”
Gate.io ranks 49th in terms of trading volume among centralized cryptocurrency exchanges, according to data from CoinGecko. The exchange recorded a 24-hour trading volume of approximately $2.34 billion.
The exchange did not immediately respond to a request for comment.
Gate.io said it will help customers transfer transactions to compliant Japanese cryptocurrency exchanges and remove Japanese language support from its platform.
The exchange also said it will announce further plans to cease service and transfer transactions in accordance with requests from Japanese financial authorities.
In recent years, the Japan Financial Services Agency (FSA) has progressively strengthened its regulatory framework to enhance consumer protection and market integrity.
Significant changes The Payment Services Act and the Financial Instruments and Exchange Act of 2020 have redefined cryptocurrencies and imposed stricter operational requirements on exchanges, including enhanced security measures and regular audits.
In 2021, the FSA finalized that oversight, introducing more stringent licensing requirements and requiring comprehensive security measures and financial stability assessments for cryptocurrency exchanges.
This included mandatory segregation of client funds from corporate assets and the introduction of rigorous anti-money laundering and know-your-customer protocols to more effectively detect and report suspicious activity.
Stablecoins have also come under increased scrutiny. FSA regulations require stablecoin issuers to maintain reserves equivalent to the value of the tokens issued and to conduct regular audits to ensure transparency and stability.
Regulation has had an impact this year as well: In February, the Japanese government passed an economic reform bill that allows limited partnerships to acquire and hold cryptocurrencies.
Initially proposed in September 2023, the bill aimed to stimulate business creation and strategic investment through tax incentives and financial support, seen at the time as a softening of its stance on the asset class.