Skip to main content

Yahoo Japan invests in a cryptocurrency exchange platform launching this fall

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.

Related Videos

“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.

Editors' Recommendations

Digital currency prices fall after SEC warns about exchange dangers
A render of virtual currency.

The values of many digital currencies took a tumble after the U.S. Securities and Exchange Commission (SEC) said on Wednesday, March 7, that platforms used to trade digital currencies need to be registered. Bitcoin dropped 6.65 percent to $10,082 after the warning, Ethereum fell 7.55 percent to $756.29, and Bitcoin Cash dropped 9.14 percent to $1,095.77. Waltonchain, Hshare, and IOStoken took the biggest hit with a value decline of more than 22 percent over the last 24 hours. 
According to the SEC, digital currencies are deemed as investments, or securities, because each digital coin has a value that rises and falls like stock. Even more, many platforms for swapping digital currencies for cash or other cryptocurrencies fall under the "exchange" umbrella as defined by federal securities laws. These platforms should either register themselves as a national securities exchange or be exempt from federal protection. 
"The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not," the SEC states. "Many platforms refer to themselves as 'exchanges,' which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange." 
The SEC notes that many cryptocurrency exchange markets claim strict standards regarding trade, but investors should be aware that these standards are not equal to or meet the same standards enforced by an SEC-registered national securities exchange. Even more, said markets provide books regarding updated bid and asking pricing along with the related data, yet there's no guarantee that they have the same "integrity" as those provided by an SEC-monitored exchange. 
As an SEC-listed platform, a cryptocurrency trading market will have rules in place to prevent fraudulent and "manipulative" trades. That includes means for disciplining investors, exchange platform members, and all associated individuals. The market also must comply with the SEC's rules while also submitting its own rules to the government agency. 
But the SEC's statement issued on Wednesday warns of a mix-and-match method involving platforms registered with the agency, and services that don't fall under the official exchange" banner, but still deal directly with SEC-registered platforms. These services would include digital wallets that receive, hold, and transfer digital currency. 
"In advancing the SEC's mission to protect investors, the SEC staff will continue to focus on platforms that offer trading of digital assets and their compliance with the federal securities laws," the SEC added. 
The many cryptocurrencies available are decentralized, meaning there is no central agency managing the monies, like a bank. The coins are also protected by cryptography, meaning the monies can't be traced back to a specific individual. But the SEC's new encouragement for trading platforms to register with the government indicates a rising interest from Uncle Sam, which recently cracked down on companies selling initial coin offerings, or ICOs. 
Last week, the agency issued dozens of subpoenas to companies, lawyers, investors, and related individuals who may have violated securities laws through these token sales. According to the SEC, all digital currencies should be listed as securities and registered with regulators. 

Read more
Companies, lawyers probed for selling cryptocurrency initial coin offerings
Bitcoin Cash

The Securities and Exchange Commission (SEC) is now investigating companies and individuals for possibly violating securities laws through initial coin offerings (ICO), or token sales, of cryptocurrency. The SEC reportedly issued "dozens" of subpoenas and information requests to determine how sales and pre-sales of ICOs work given they don't follow the same rules that regulate initial public offerings (IPOs) to protect investors. 
An IPO, or Initial Public Offering, is when a privately held company goes public with its stock. Companies take this route to become publicly traded on the stock market, or to generate funds to expand their footprint. Meanwhile, companies use an ICO to raise funds for a new cryptocurrency business or platform. Investors use legal tender or digital coins to purchase a percentage of the new cryptocurrency in return for digital tokens, financially fueling the platform. 
Yet it's the procedure ICOs use that may be generating government involvement. It's similar to how developers raise money to create games by selling an "early access" token on digital platforms, like Steam, to fund the project. ICOs are listed as "software presale tokens," and use descriptors such as "crowdsale" or "donation" instead of the ICO term to escape federal regulation. 
But the SEC is catching on, and is now grilling companies that sold digital coins to raise funds, and the lawyers and advisory firms that help with sales. The SEC began demanding information last year, and then rolled out around 80 subpoenas over the last three months to companies and what the SEC calls gatekeepers: individuals who help the sale of ICOs. 
According to the SEC, virtual currencies should be listed as securities and registered with regulators. Jay Clayton, chairman of the SEC, believes many "promoters" of ICOs and cryptocurrencies simply aren't complying with securities laws. He asked the agency in January to change that. 
“Market professionals, especially gatekeepers, need to act responsibly and hold themselves to high standards,” Clayton said. “To be blunt, from what I have seen recently, particularly in the initial coin offering space, they can do better.” 
The subpoenas request information about sold cryptocurrencies, how companies market token sales, and the identities of individuals who purchased those tokens. The subpoenas were distributed across multiple cities including Boston, New York, and San Francisco. Unnamed sources who viewed the subpoenas didn't indicate if an additional wave of subpoenas is on the way to digital coin investors. 
“Generally, subpoenas are the guided missiles of SEC enforcement actions," says Aaron Kaplan, a securities attorney and co-founder of Prometheum. "There’s going to be a big reckoning for those who have operated outside the federal securities laws, with more SEC enforcement actions and criminal prosecutions in the near future.” 
Online retailer Overstock took a nosedive on the stock market Thursday after disclosing in a regulatory filing that it's currently under investigation by the SEC over its cryptocurrency exchange subsidiary tZero. The company raised $100 million from its ICO alone, and another $150 million to expand its blockchain-based trading system. Overstock must now provide documents related to the ICO and its tokens. 

Read more
BitGrail cryptocurrency exchange loses $170 million in Nano tokens
Bitcoin Cash

The Wall Street Journal has reported that Italian cryptocurrency exchange BitGrail has lost about 17 million Nano tokens. In total, the stolen tokens were worth $170 million.

BitGrail made the announcement on its website and said that it had lost about $170 million due to fraudulent transactions. It has already notified the authorities, who are investigating the matter. In addition, the exchange has placed a hold on all transactions in order to verify their authenticity.

Read more