Seychelles Republic-based cryptocurrency exchange Huobi Pro, the world’s third largest cryptocurrency exchange according to CoinMarketCap trading volume data, will suspend trading services to users residing in Japan as of July 2nd.
At the moment, Huobi Pro still has not announced the plans publicly. Instead, Huobi Pro quietly sent around an announcement email to its customers alerting them that the Japanese language option will be removed from the exchange’s homepage and that services will be suspended in the coming days.
Local media outlet Coinpost obtained the email announcement, which reads:
1, Huobi is a company that deals with electronic assets through the Internet and telecommunication network, compliant with the laws of each country and conducting business activities. Huobi Global Limited. Is a company registered and established in the Seychelles Republic under the relevant laws of the Seychelles Republic.
2, Huobi does not register the virtual currency exchange business based on the "funds settlement law" of Japan. Therefore, we do not conduct virtual currency exchange business in Japan.
3, Huobi respects Japanese law and has not solicited any persons who reside in Japan (individuals or corporations) at all.
Considering how stringent Japan’s Financial Services Agency has become recently, it appears that Huobi Pro was facing increasing pressure from Japanese regulators to either officially apply for a registration with the FSA to operate an exchange in the region and begin following their standards and guidelines, or cease operations in the country. Huobi chose to follow the lead of others, and simply suspend trading for Japanese residents to avoid oversight from the FSA.
Back in April, another major cryptocurrency exchange, Kraken, also suspended service to investors in Japan. Other exchanges located in Japan, have shut down their operations entirely. Meanwhile, the FSA has been issuing business improvement orders to the rest of the exchanges so they can bring cyber security and anti-money laundering standards up to par with Japanese regulator’s guidelines.