- Cryptocurrency derivatives platform BitMEX will no longer serve Japanese users.
As per the official announcement on Tuesday, the Seychelles-based exchange is restricting access to its users who are Japanese residents starting 30 April 2020, 23:00:00 JST for new users, and 1 May 2020 for existing registered users.
As such, a first time Japan resident user will be unable to trade while any registered Japan resident customer will no longer be able to open a new position or increase an existing open position, open positions will be unaffected.
Bitmex will restrict access from Japan residents due to the strengthened regulatory enforcement starting in May. Theoretically this should also apply to any other derivative exchanges.
A step backwards for the Japanese market and for Bitmex as well.https://t.co/VsTFiliSMN
— Koji Higashi (@Coin_and_Peace) April 28, 2020
This is not the first time BitMEX is restricting users, back in August, the exchange added Seychelles, Hong Kong, and Bermuda to its list of restricted jurisdictions that already included USA, Quebec, Hong Kong, China, Crimea, Iran, Syria, North Korea, and Sudan, from accessing its platform.
Why the restriction?
This new restriction has been in response to the amendments to the Japan Financial Instruments and Exchange Act (FIEA) and Japan Payment Services Act (PSA) effective as of 1 May 2020.
As per the amending regulations, crypto exchanges have to register with the regulatory authorities and comply with the relevant provisions.
Crypto exchanges also have to manage users’ money separately from their own cash flows. In a move to tighten restrictions on the crypto custodians, the agency now requires the exchanges to find a third-party operator to hold their clients’ money.
Moreover, they are required to use “reliable methods” like cold wallets and in case they are using hot wallets, exchanges would have to hold “the same kind and the same quantities of crypto assets” so that users can be reimbursed in the event of theft.
“We support the efforts of regulators to help establish standards for cryptocurrency products that will underpin the advancement of this rapidly growing asset class,” said the exchange.
“We will continue to work with the Japanese regulatory authorities to support their aims for the Japan market and will keep our Japan users updated.”
As we reported, since Black Thursday, BitMEX has lost nearly 32% of its market share and much of that has been grabbed by Binance.