SEBC is a JFSA-registered crypto exchange that also offers consultation services in addition to its brokerage service. The exchange is based in Tokyo, and it supports 11 trading pairs at the time of writing. By acquiring 100% of SEBC, Binance has entered the Japanese market as a Japan Financial Services Agency (JFSA) regulated entity. According to Binance, the company aims to support a responsible global environment for cryptocurrencies by providing Japanese-regulated services through SEBC.
When it comes to regulatory approvals, Binance has already secured them in countries such as France, Poland, Spain, Bahrain, Abu Dhabi, Dubai, New Zealand, Kazakhstan, Cyprus, Italy, and Lithuania. However, this is the first time Binance has obtained a licence in East Asia.
Binance officials highlighted for the company’s blog that, as far as cryptocurrency adoption is concerned, the Japanese market has an important role to play, particularly in the context of its highly developed tech ecosystem that gears it up for a strong blockchain uptake.
SEBC representatives revealed that the acquisition will help them in their user protection efforts, as Binance’s strong compliance system will help create a more compliant atmosphere for Japan-based users and help them access important crypto services needed for mass adoption in the future.
According to sanctionscanner.com, Japan currently has one of the most advanced regulatory environments for cryptocurrencies, as the country recognises Bitcoin and other virtual assets as legitimate property under the Payment Services Act (PSA). Due to this legislation, Crypto exchanges operating in Japan must adhere to conventional Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) guidelines.
In 2020, the PSA and the Financial Instruments and Exchange Act (FIEA) received some amendments including a revision for the term ‘virtual currency’ to ‘crypto asset’.
In Japan, VASPs that offer exchange services need to adhere to strict KYC (Know-Your-Customer) rules and keep a close eye on transactions that might be considered questionable. They need to properly maintain verification and transaction records by creating, keeping, and updating them, and they should also keep their records for at least seven years.
If they come across a suspicious transaction, these VASPs are expected to report it to an appropriate authority. Sanctionscanner.com reports that any transaction above JPY 30 million (USD 220,000), in crypto or fiat, must be notified to the Ministry of Finance following the Foreign Exchange and Foreign Trade Act).
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