In a warning letter released on Friday, Japan’s Financial Services Agency (FSA) said that a number of foreign cryptocurrency exchanges, including Binance, Bybit, MEXC Global and Bitget, have been conducting business in the country without proper registration, violating the nation’s fund settlement laws.

According to the warning letter, the FSA stated that the listed exchanges had breached Japan’s fund settlement regulations by conducting crypto asset exchange business without proper registration. The regulator clarified that the current list of unregistered traders may not accurately represent the current state of unregistered businesses.

The FSA’s action follows a crackdown on unregistered crypto exchanges in the east Asian nation. In 2020, the FSA introduced new regulations requiring crypto exchanges to register with the agency and obtain a license to operate in Japan.

Binance being warned by the FSA, signifies the cryptocurrency industry in Japan and other nations is facing greater regulatory scrutiny. The risks associated with unregulated cryptocurrency exchanges, such as fraud, money laundering and market manipulation, are concerning regulators more and more

Although Japan is working on new regulations for the crypto and Web3 sectors, the country has not cracked down on the industry as hard as some other larger economies such as the US.

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The crypto exchange firm, Binance and its founder, Changpeng Zhao, were recently sued by the United States Commodity Futures Trading Commission (CFTC) over US regulatory violations.

The FSA also issued a formal warning letter to Binance for operating without necessary permissions back in 2021.

Cointelegraph reached out to Binance, Bybit and MEXC for comments on the warning issued by the Japanese FSA but didn’t get any response at the time of publication.

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