In a rare turn of events, Yahoo Japan announced steps to launch a cryptocurrency exchange in Japan. This was after the tight regulation, by Japan’s Financial Services Agency (FSA), which demanded that all domestic crypto exchanges register with it. After over $530 million theft on Coincheck, the FSA became serious on registering all virtual currency exchanges in the country. Binance was caught in the middle of that regulation as it has since failed to register with the regulator, which led to a ban warning. Being the largest crypto exchange, in terms of the trading volume, Binance is looking to leave Japan’s market and set up an office in Malta, where the terms are favorable.
BitARG exchange buyout
Yahoo Japan is not looking to roll out a brand new exchange for cryptocurrencies, straight away. Instead, it is looking to start off with a buyout of the BitARG shares. It has set aside about 2 billion yen, around $19 million, to buy a stake of 40% in BitARG. BitARG is a cryptocurrency exchange in Japan and is also one of those registered with Japan’s FSA. The acquisition will be overseen by the subsidiary of Yahoo Japan, YJFX, where it will send engineers and experts to BitARG, in order to develop the system for crypto trading. Within a year, Yahoo Japan will launch a complete cryptocurrency exchange platform, which is set to fully launch around March 2019.
This buyout could spark a new wave of cryptocurrency adoption, despite Binance threatening to leave the market due to fears of a ban by the FSA. However, Binance has not formally indicated to leave the Japan market, despite making efforts to set up an office in Malta.
The Binance effect
The news about the largest crypto exchange on the verge of being banned by the FSA for the failure of acquiring a license with them shook the market. The said warning was issued on March 22, which sent the price of bitcoin falling by about 5%. However, with the CEO of Binance, Changpeng Zhao, citing constructive dialogues with the country’s FSA, it is expected that the exchange may give into pressure and register with the regulator.
Regulation to grow investor confidence
Japan’s FSA looks to tighten up regulations by forcing cryptocurrency exchanges, operating locally, to register with them. All this started in April 2017, when all crypto exchanges in the country were required to register with the FSA. However, after what happened to Coincheck, the regulator has moved with speed to crackdown on exchanges, which are still operating without a license from the FSA. On March 8, the FSA suspended Bit Station and FSHO and ordered seven others, including Coincheck, to improve their security systems. This could be a good thing for the cryptocurrency market and for both investors and crypto exchanges.
