•Binance plans to reenter the Japanese market after acquiring a 100% stake in a licensed crypto service provider in the country.
• The acquisition of Sakura Exchange BitCoin (SEBC), a Japan Financial Services Agency-licensed business, would mark the re-entry of global exchange in the Japanese market after four years.
• Binance had to shut its operations and plans to open a headquarter in Japan in 2018 after an FSA notice for operating without a license.
• Binance’s acquisition of a regulated entity to enter a crypto market where it has found it difficult to acquire a license independently is nothing new.
• Recently, Japan has eased up its regulatory policy further to encourage more crypto startups and allow them to flourish and has made coin listings easier.
Binance, the world’s largest cryptocurrency exchange by volume, plans to re-enter the Japanese market after acquiring a 100% stake in Sakura Exchange BitCoin (SEBC), a licensed crypto service provider in the country. The acquisition would mark the re-entry of global exchange in the Japanese market after four years.
Binance had to shut its operations and plans to open a headquarter in Japan in 2018 after an FSA notice for operating without a license. However, with this new development, it looks like they will be able to bypass that issue and resume their operations in one of the world’s most important crypto markets.
This move by Binance is not surprising given that they have been acquisitive in the past when it comes to entering new markets. Recently, Japan has eased up its regulatory policy further to encourage more crypto startups and allow them to flourish, and has made coin listings easier. This is a clear indication that Japan is bullish on cryptocurrencies and wants to nurture the industry.
Sakura Exchange Bitcoin (SEBC) was founded in January 2018 and was one of 16 digital currency exchanges registered with the Japanese Financial Services Agency (FSA) as of March 2020. The FSA is Japan’s financial regulator and has been scrutinizing cryptocurrency exchanges since the hack of Tokyo-based Coincheck in early 2018. The agency requires exchanges operating in Japan to have adequate security measures in place to protect users’ assets as well as implement anti-money laundering measures.
So far, 16 digital currency exchanges have been granted licenses by the FSA while another 23 applications are still being reviewed. Of those 23 applications, six are from overseas firms seeking to enter the Japanese market including Binance. If approved, Binance would be the first foreign-owned exchange operator in Japan.
Sakura Exchange BitCoin currently offers trading in eight cryptocurrencies including bitcoin (BTC), ether (ETH), Ripple’s XRP, Bitcoin Cash (BCH), Litecoin (LTC), Ethereum Classic (ETC), NEM APE token (XEM)and cash(ZEC). The exchange also allows margin trading with up 5x leverage on BTC/JPY pairs.
Since SEBC is already registered with the FSA, Binance would not need to go through the application process itself which can be quite lengthy. The process includes a review of an exchange’s business plan, governance structure, and system security practices as well as an on-site inspection. If approved, Binance would be able to operate legally in Japan and offer its services to Japanese investors starting next year.
This is big news for both Binance and the Japanese cryptocurrency market. For Binance, it’s an opportunity to get back into a market where they’ve struggled to obtain a license independently. And for Japan, it’s further evidence that the country is bullish on cryptocurrencies and wants to nurture the industry within its borders. It will be interesting to see how this plays out and if other exchanges follow suit by acquiring licensed businesses in order to enter new markets more easily.
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