BitARG Exchange Tokyo confirmed on Friday, April 13, that it made a deal to sell stock shares to a subsidiary of Yahoo Japan. This investment will bring in Yahoo Japan’s “service operation and security expertise” to strengthen BitARG’s upcoming cryptocurrency exchange platform. Yahoo Japan now holds a 40 percent portion of the exchange while BitARG parent company CMD Laboratories will hold the remaining 60 percent.
BitARG Exchange Japan and Yahoo Japan did not provide the financial details of the deal. But an unnamed source familiar with the sale claims the transaction equaled to around 2 billion to 3 billion yen, which converts to $18.6 million to $27.9 million.
“We will enter the blockchain-related area where applications are expected in the virtual currency business,” reads a rough translation of Yahoo Japan’s statement. “In addition, by utilizing the service operation and security expertise of the Yahoo group, we support the operation of exchanges operated by BitARG Exchange Tokyo and the operation after the start. It is easy to use and safe for exchange services.”
The news arrives after BitARG executive Yoon Hee Yuan denied rumors that the exchange would sell 40 percent of its stock to Yahoo Japan to launch a new cryptocurrency exchange in the region. Yaun said at the end of March that the company was studying “various possibilities” such as investments and partnerships with other companies to strengthen the upcoming platform and its management.
BitARG plans to launch its new cryptocurrency exchange platform in the fall that will primarily deal with the Bitcoin cryptocurrency. A second investment from other Yahoo subsidiaries are expected to be made at the beginning of 2019 with a final product launching in April 2019. The cryptocurrency trading platform received its approval from Japan’s Financial Services Agency in December and is ironing out the business side before going live this fall.
BitARG Exchange Tokyo isn’t the only exchange getting a cash injection. Monex Group said last week that it purchased 100 percent of Coincheck’s shares for $34 million. According to the company, the deal will fuse Coincheck’s knowledge of blockchain technology and cryptocurrency with its knowledge of the financial industry. The investment should also help Coincheck “enhance” its internal security to better prevent hacks.
Japanese cryptocurrency exchange Coincheck saw the theft of around $530 million in NEM tokens earlier in 2018. The company admitted to a lapse in security, including a much-needed multi-signature approval component, that allowed a single hacker to transfer the virtual coins stored in Coincheck’s “hot wallet” to an external account. Hot wallets are typically connected to external networks whereas cold wallets used by most individuals are not.
According to reports, the digital coins were sent to 11 different addresses although the owner of these accounts is still unknown. Japan’s Financial Services Agency ordered the exchange to strengthen its security and management system in early March. Coincheck began issuing refunds to customers affected by the January 26 hack several days later.