Bitcoin prices tumbled on Thursday after Japan’s financial watchdog said it plans to issue a warning against Binance for operating in the country without government approval. Binance’s CEO quickly fired back at the reports, claiming that his exchange was in “constructive dialogues” with the Japanese government.

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BTC/USD Price Levels

After making headway for most of the week, bitcoin fell on Thursday to a low of $8,482. At the time of writing, BTC/USD was down more than 3% at $8,598. The slide pulled bitcoin’s market cap down to $147.5 billion, according to CoinMarketCap. The digital asset’s total value hit a high of $155.3 billion on Wednesday.

Eve with the decline, bitcoin is net positive for the week and controls 44% of the total cryptocurrency market. The so-called bitcoin dominance index is up around 12 percentage points from the record low seen in January.

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Other crypto assets followed bitcoin lower on Thursday. The total market capitalization for all cryptocurrencies was off by about $5 billion compared with 24 hours ago.

Bitcoin’s 24-hour trade volumes fell to $5.6 billion, or roughly one-third of the total market turnover. Bitfinex and Binance were the busiest exchanges for BTC-related trades.

FSA Raises Red Flag Over Binance

Reuters and Nikkei reported Thursday that Japan’s Financial Services Authority (FSA) will issue a formal warning against Binance for setting up shop in the country without registration. According to the original Nikkei report, the FSA will work will pursue criminal charges against Binance if it fails to halt its domestic operators. Sixteen crypto exchange operators are currently registered with the FSA.

The report wasn’t taken lightly by Binance’s chief executive Changpeng Zhao, who criticized Nikkei for “irresponsible journalism” in a Thursday morning tweet.

“Nikkei showed irresponsible journalism. We are in constructive dialogs with Japan FSA, and have not received any mandates. It does not make sense for JFSA to tell a newspaper before telling us, while we have an active dialog going on with them,” he said. At the time of writing, the tweet had more than 2,600 responses and over 4,700 likes.

Japan moved swiftly last year to recognize bitcoin and other digital currencies as legal tender, but regulators in the country have had to re-think their approach following multiple cyberattacks. Back in January, hackers made out with more than $500 million worth of NEM tokens in a large-scale attack on Coincheck, one of Tokyo’s largest exchanges. The attack prompted regulators to carry out inspections of 15 unlicensed exchanges. The investigation resulted in punitive measures for seven exchanges over insufficient risk controls.

In the wake of the attacks, Japan’s regulated exchanges announced plans to form a self-regulating body to “bolster trust” within the community.