Well, that's bad news for Binance for sure. Last thing you'd want as a growing exchange to have all of a sudden the country with one of the top BTC trading volumes in the entire world to tell you to cease operations.
However, I would not panic yet. Realistically I think most of the volume in Japan is probably in Bitflyer anyways, and people who use binance are more scattered over the world. There will be Japanese users that will be forced to stop using it, but I don't think it's a large percentage compared to the entire Binance customer base(correct me if I'm wrong).
Binance has been growing significantly because of their soft and non caring approach to make themselves abide by the rules of each country they are operating in. It's not for nothing that it has been growing so much, and that in such a short period of time. In the same way, this concerns other exchanges as well. In most cases registering and obtaining the required licences to operate in different countries is time consuming and very costly, which is why exchanges blatantly skip it and hope to delay the process till they get asked/forced to do so, and that time for Binance has come. Crypto land is no longer the free space it once was, people should accept it....
Absolutely. Binance is known for its soft KYC which is why it's so popular. I think sooner or later, they will be forced to comply with regulations. Just a matter of time.