Japan’s financial watchdog on Friday issued a warning to Hong Kong-based cryptocurrency exchange Binance for operating without registration, the latest move by regulators to tighten standards in the country’s digital money industry.
The Financial Services Agency (FSA) said in statement that it had issued the warning to Binance, one of the world’s biggest cryptocurrency exchanges, for engaging in business with Japanese residents via the internet despite lacking permission to do so.
The regulator said Binance likely allowed Japanese residents to open accounts without confirming their identities, adding that the exchange would face criminal charges if it continued to do business without a license.
An FSA official told Reuters it had not given the exchange any particular deadline to cease its operations.
Binance Chief Executive Changpeng Zhao said on Twitter the exchange was told of the warning on Friday morning, and was engaging with the watchdog.
“Our lawyers called JFSA immediately, and will find a solution,” he wrote, referring to the regulator. “Protecting user interests is our top priority.”
Binance did not immediately respond to a request for additional comment.
Last year, Japan became the first country in the world to regulate the cryptocurrency industry, requiring all exchanges to register with the authorities in an effort to bolster consumer protection and clamp down on illegal uses of digital money.
The warning against the Hong Kong exchange marked further steps by the FSA to shore up consumer protection in the wake of the $530 million theft of digital money from Tokyo-based Coincheck Inc in January.
In February, it issued a warning to Macau-based Blockchain Laboratory for operating without registration.
The watchdog also recently punished seven cryptocurrency exchanges already registered or awaiting registration over issues ranging from lax security to poor controls on money laundering.
This article originally appeared on Reuters