Financial Services Agency Updates Warning on Unregistered Cryptocurrency Operators

Key Points of This Article

• Warning letter issued to IZAKA-YA operators in September; update on overseas operators list
• Consumer Affairs Agency prepares for damage detection through AI analysis and early warning office

Update on Warnings for Unregistered Operators

On the 10th, the Financial Services Agency updated its warning page titled "Transactions with Unregistered Operators Require Caution!!" and added a link to the Consumer Affairs Agency's measures against fraudulent businesses that cause serious financial damage to many consumers due to their collapse. The agency also announced the update on its official X account.

The page was first published on June 30, 2023. It explains that businesses engaging in cryptocurrency transactions or stock and FX trading targeting residents of Japan must be registered under Japanese law. The text has not changed from previous versions, and this update adds a link to the Consumer Affairs Agency's initiatives.

Examples of Troubles such as Withdrawal Refusals

According to the Financial Services Agency, unregistered operators are likely to lack the investor protection measures that registered operators have, as the authorities cannot verify their compliance. The page cites examples of cases where withdrawals that were previously possible were suddenly refused or where "exorbitant withdrawal fees" were demanded. There have also been many reports of operators suddenly becoming unreachable.

As a verification resource before transactions, the agency provides a list of registered cryptocurrency exchange operators and a "comprehensive search function for financial operators." If a warning letter is issued to an unregistered cryptocurrency exchange operator, their name will also be disclosed.

The list of overseas operators that received warning letters was updated in September, with Izakaya Limited, located at an address in Kowloon, Hong Kong, newly listed as the operator of the trading service "IZAKA-YA." By November 2024, five companies, including KuCoin and Bybit, are listed on the same list.

Consumer Affairs Agency's September Measures Package

The linked measures are part of a package announced by the Consumer Affairs Agency on September 1. It targets fraudulent businesses that solicit investments from numerous consumers by promising high returns, ultimately leading to business collapse and making recovery of damages difficult. Recent trends include investments in overseas financial products and real estate businesses, as well as deposits of goods such as USB drives.

Considering the challenges of understanding the actual state of businesses and determining their legality, the agency aims to gather clues from consultation information at consumer life centers nationwide (PIO-NET) and incorporate AI to analyze the context of consultation content.

The warning will not only identify specific methods but is also expected to name businesses based on Article 38 of the Consumer Safety Act. The Consumer Policy Division has established an early warning office as the responsible department.

The Financial Services Agency urges anyone who feels uneasy or has encountered troubles in transactions with unregistered operators to consult the "Fraudulent Investment Consultation Dial" (0570-050588) of the Financial Services Agency's Financial Services User Consultation Office or the information provision window of the Securities and Exchange Surveillance Commission.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.