Binance Returns to Japan with Regulated Subsidiary

Binance has begun establishing a new, fully regulated subsidiary in Japan following a five-year absence from the market.

The move follows the November 2022 acquisition of the regulated cryptocurrency exchange Sakura Exchange Bitcoin (SEBC).

As part of the agreement, SEBC will cease its current operations by May 31 and reopen in the coming weeks as Binance Japan.

Users of the global exchange platform in the country will be required to register with the new entity. The migration will be available after August 1, 2023, and a new identity verification process (KYC) will be implemented to meet local requirements.

Binance previously disclosed that any remaining funds on the SEBC exchange would be automatically converted to Japanese yen and transferred to users’ bank accounts beginning in June.

Due to the constricting regulatory environment, the exchange’s strategy for expanding its global reach has been acquiring locally regulated entities.

Binance made a similar expansion in Singapore in 2021, Malaysia in 2022, and most recently in Thailand. It ceased operations in Japan in 2018 after failing to obtain an independent license from local authorities.

The exchange will not offer derivative services in Japan, according to a notice on its website. The global version of Binance will not accept new derivative accounts from the country.

In addition, Japanese residents using the global platform after June 9 cannot increase or open new options positions.

The exchange announced that pending orders would be canceled and existing positions must be closed by June 23. There will be no trading or subscription options for Binance Leveraged Tokens.

“In the future, we intend to continue expanding our service offerings in Japan and will work closely with regulators to potentially offer derivatives services in a compliant manner,” the company wrote.

Japan was among the first countries to implement crypto regulations. The local laws expedited the February recovery of funds at FTX Japan, a subsidiary of the now-defunct cryptocurrency exchange FTX.

Regulations in Japan require cryptocurrency exchanges to segregate client funds from other assets.