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Japanese Exchange BitFlyer Acquires FTX Japan: Shifting Focus to Institutional Crypto Custody

ByDayne Lee

Jun 23, 2024

Japanese Exchange BitFlyer Acquires FTX Japan: Shifting Focus to Institutional Crypto Custody

BitFlyer Holdings has announced its acquisition of FTX Japan, the Japanese arm of the defunct crypto trading platform FTX, with plans to rebrand it as New Custody Company. This move marks a significant shift in FTX Japan’s business strategy from operating a crypto exchange to focusing on institutional-grade crypto custody services.

Transition to Institutional Crypto Custody

Following the acquisition, New Custody Company aims to establish itself as a leading provider of institutional crypto custody solutions in Japan. This strategic pivot underscores BitFlyer’s commitment to meeting the evolving needs of financial institutions in the crypto space.

BitFlyer emphasized in its announcement that New Custody Company will align its offerings with potential developments in Japan’s regulatory framework, particularly regarding crypto asset spot ETFs. This forward-looking approach positions the company to cater to the institutional demand for secure and compliant crypto asset management solutions.

Business FocusInstitutional-grade crypto custody services
Future ServicesPotential offerings related to crypto asset spot ETFs
Customer Accounts TransferMigration of FTX Japan’s customer accounts to BitFlyer
Regulatory ConsiderationsAlignment with evolving Japanese regulatory landscape

According to reports from Nikkei, BitFlyer’s acquisition of FTX Japan involved significant financial investment, totaling billions of yen. This strategic move underscores BitFlyer’s determination to consolidate its position in the Japanese crypto market amidst ongoing regulatory developments and market dynamics.

Post-FTX Japan Evolution: From Liquid to FTX and Beyond

FTX Japan’s journey reflects the tumultuous landscape of the crypto industry. Initially known as Liquid, the exchange was acquired by Sam Bankman-Fried’s FTX in early 2022, only to rebrand shortly before FTX’s collapse in November 2022. Despite these challenges, FTX Japan managed to safeguard customer assets and resume operations independently in early 2023.

Timeline of FTX Japan’s Evolution:

  • Acquisition by FTX: Integration into the FTX empire in early 2022.
  • Rebranding and Challenges: Transition to FTX Japan and subsequent operational hurdles.
  • Customer Asset Protection: Assurance of customer asset security post-FTX’s bankruptcy proceedings.

During its peak, FTX aggressively expanded its footprint through acquisitions, including the notable purchase of Voyager Digital for $1.4 billion in 2022. However, FTX faced legal setbacks, culminating in a $450-million settlement agreement with bankrupt Voyager in April 2024.

Legal Challenges and Settlements:

  • Bankruptcy Proceedings: Impact of FTX’s collapse on its subsidiaries and legal entanglements.
  • Judicial Proceedings: Recent developments following Sam Bankman-Fried’s legal issues in the U.S.

BitFlyer’s acquisition of FTX Japan and its transformation into New Custody Company signify a pivotal moment in Japan’s crypto landscape. By focusing on institutional custody solutions, BitFlyer aims to capitalize on growing institutional interest in cryptocurrencies while navigating regulatory complexities.

Featured image credit: Casimiro via Jobba

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.

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