In a significant development for the cryptocurrency industry, bitFlyer, a leading Japanese crypto exchange, is poised to acquire 100% of the share capital of FTX Japan. This acquisition of the local branch of the globally known but now bankrupt FTX exchange has been under wraps until recently.
The acquisition hinges on approval from the U.S. Bankruptcy Court due to FTX’s ongoing legal troubles. Once approved, FTX Japan will undergo a name change and transition its focus to crypto custody, leveraging bitFlyer’s expertise in security and blockchain technology.
Under the acquisition agreement, bitFlyer will acquire all shares of FTX Japan on June 19, 2024, and take over its business operations. The acquisition price is expected to be in the billions of yen.
BitFlyer expects to pursue a policy change after the acquisition, first of all, they will change the corporate name of FTX Japan to a new custody Company.
The basic policies of the New Custody Company are expected to be as follows:
New Custody Company will transfer FTX Japan customer accounts to bitFlyer, Inc. with the consent of the relevant customers.
New Custody Company will offer new crypto custody (crypto asset management) services as its core business.
New Custody Company will provide services related to crypto asset spot ETFs[*3], centered around its core business, if the legal system is established in the future in Japan.
New Custody Company will continuously maintain the crypto asset exchange service provider and Type 1 financial instruments business license depending on the situation.
The bitFlyer Group believes they will be able to deliver unique value by offering both
crypto custody service, and services related to crypto asset spot ETFs under New Custody Company.
BitFlyer plans to rebrand FTX Japan significantly to rebuild consumer trust amid ongoing legal challenges. As the acquisition finalizes, industry stakeholders are keenly observing its impact on Japan’s broader crypto landscape.
Following the collapse, FTX Japan faced operational restrictions, including a temporary halt on asset withdrawals ordered by Japanese financial authorities. Seeking to stabilize, the exchange looked for a buyer, and bitFlyer’s acquisition is seen as a crucial step toward market consolidation.
This acquisition coincides with a period of rapid growth in Japan’s crypto market. The Japan Cryptocurrency Exchange Association reports that the number of crypto accounts in Japan exceeded 10 million by April 2023, tripling over the past five years. Despite this growth, user safety remains a concern. Concurrently, the strengthening of Japanese Yen is boosting the adoption of JPY crypto trading pairs.