Japan Warns Hong Kong-Based Crypto Operator Over Unregistered Services

Japan's Financial Services Agency (FSA) has issued a formal warning to Hong Kong-based Izakaya Limited for allegedly operating an unregistered cryptocurrency exchange and lending service in Japan. The FSA claims that IZAKA-YA offered its services, including crypto lending, swap services, and exchange functions, to Japanese residents without the necessary registration.

The Payment Services Act requires any entity facilitating cryptocurrency exchange or custody for Japanese residents to register with the FSA. Operating without such registration is a violation that can lead to criminal penalties and public notice warnings.

In response to the warning, IZAKA-YA announced on August 24 that it had temporarily suspended transfers and withdrawals for certain accounts due to suspected illicit fund inflows or potential money laundering. The company stated it would require enhanced know-your-customer (KYC) verification for all users.