Japanese mega e-commerce and internet company Rakuten Inc. is entering the crypto space. Instead of submitting a new application to the country’s financial regulator, Rakuten is acquiring an existing crypto exchange to fast-track into the Japanese crypto market.
Rakuten to Operate Crypto Exchange
Rakuten Inc. announced Friday that “it decided to acquire Everybody’s Bitcoin Inc. through its subsidiary, Rakuten Card Co. Ltd.” After the stock acquisition, which is expected to take place on October 1, Everybody’s Bitcoin will become a wholly-owned subsidiary of Rakuten. The acquisition cost is listed as 256 million yen (~US$2,305,484).
The e-commerce giant wrote:
We expect that the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future. In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function, and have been considering entry into the cryptocurrency exchange industry as the Rakuten Group.
Furthermore, the company revealed that a growing number of its FX and securities customers “have been calling for the provision of a cryptocurrency exchange service.”
Founded in 1997, Rakuten claims to have more than 1.2 billion members globally. The company has over 70 businesses across e-commerce, digital content, communications, and fintech. It owns messaging app Viber and has invested heavily in car-hailing service Lyft. In 2016, the firm established a dedicated research and development unit in Belfast called Rakuten Blockchain Lab. In addition, the Japanese government gave Rakuten a concession in April to operate Japan’s fourth major wireless carrier.
About Everybody’s Bitcoin
Known in Japanese as Minnano Bitcoin, Everybody’s Bitcoin began operating a crypto exchange service on March 30 last year. The exchange currently offers the trading of BTC, BCH, and ETH against the yen.
In April last year, the revised Payment Services Act went into effect in Japan, legalizing cryptocurrency as a means of payment and requiring all crypto exchanges in the country to register with the Financial Services Agency (FSA).
Everybody’s Bitcoin applied for a license on September 7, 2017, but its application is still under review. The FSA has, however, approved 16 crypto exchanges. As for those companies that were already operating crypto exchanges prior to the regulation taking effect, the agency has allowed them to keep operating while their applications are being reviewed. These companies are referred to as “quasi-operators” of crypto exchanges or “deemed” crypto exchanges.
Currently, Everybody’s Bitcoin operates the business as a deemed cryptocurrency exchange and is waiting for approval of the official registration.
A Fast Track to Registration
Since the hack of Coincheck in January, the FSA has tightened its review process of crypto exchanges. The agency has issued a number of business improvement orders and has temporarily shut down some quasi-operators.
On April 25, Everybody’s Bitcoin received a business improvement order from the Kanto Local Finance Bureau. “Everybody’s Bitcoin is working to implement improvements in the items outlined in the business improvement order,” Rakuten detailed.
Due to the stricter review process, most of the 16 quasi-operators have exited the industry. The FSA confirmed this week to news.Bitcoin.com that only three applications from these operators are left. They are for Coincheck, Lastroots and Everybody’s Bitcoin.
Coincheck was acquired by Monex Group after the hack. Lastroots just had more investments from SBI Group, which also has its own crypto subsidiary, SBI Virtual Currencies, and offers a crypto trading service called Vctrade.
According to Friday’s announcement:
Rakuten Group decided to acquire Everybody’s Bitcoin shares so that it can realize the early registration as a cryptocurrency exchange and develop cryptocurrency services to customers.
According to the e-commerce giant, Everybody’s Bitcoin “decided to expand the business under the Rakuten Group to maximize synergies…in order to further promote its cryptocurrency business.”
What do you think of Rakuten fast-tracking into the Japanese crypto market? Let us know in the comments section below.
Images courtesy of Shutterstock, Rakuten Inc, Everybody’s Bitcoin, Coincheck, and Lastroots.
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