Cryptocurrency exchange Huobi Pro is to cease offering trading services to investors living in Japan starting from next month.
According to a news report from Coinpost, the exchange announced the news in an email sent to investors in Japan on Wednesday, stating it will remove the Japanese option from its homepage and suspends trading services from July 2.
In a response to a CoinDesk enquiry, Huobi Pro – currently the third largest exchange in the world by 24-hour trading volume – confirmed the news, but has yet to provide further details such as the plan for users' asset withdrawals.
As suggested in the Coinpost report, Huobi Pro made the decision to withdraw Japan-based services because is not registered with the Financial Services Agency (FSA), Japan's financial watchdog, as mandated under a money transaction law introduced in 2016. It is not currently clear if the exchange has been contacted by the FSA over the issue.
Earlier this year, Huobi Pro indicated it was partnering SBI Virtual Currency – the licensed exchange backed by Japanese financial giant SBI Holdings – to launch a regulated platform in Japan. However, the plan was notably scrapped by SBI Virtual Currency back in March.
According to web traffic tracking site Alexa, currently 13.3 percent of the visitors on Huobi Pro come from Japan. The company would not indicate to CoinDesk when asked if it is considering filing a registration application with the FSA as a next step.
In March, Binance, currently the second largest cryptocurrency exchange by trading volume, notably received a warning from the FSA stating that, as a foreign entity, it was offering trading services to Japanese residents without a license. Binance confirmed at the time that its legal team was in dialogue with the agency.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.