Japanese e-commerce giant Rakuten has announced plans to acquire a Tokyo-based cryptocurrency exchange called Everybody's Bitcoin that was established in December 2016 and launched in Japan in March 2017. It remains an unlicensed exchange that was the subject of a probe from Japan's Financial Services Agency (FSA) in January of this year followed the Coincheck hack, which saw a cryptocurrency theft exceeding $500 million. (See also: Coincheck May Have Suffered The Worst Hack In Cryptocurrency.)
The acquisition will cost Rakuten 265 million yen (around $2.4 million) and will be effective Oct. 1. Though the Rakuten group is primarily known for a e-commerce, it also offers a diversified range of services spanning travel and leisure, digital content and communications and financial technology services like credit cards, insurance, banking, securities and digital money. The move to acquire a cryptocurrency platform is attributed to the increasing demands from a growing number of foreign exchange clients of its securities division who wish to have a cryptocurrency exchange service.
The development comes on the back of the company establishing the Rakuten Blockchain Lab in 2016 for researching the blockchain technology. Highlighting the increasing prominence of the cryptocurrency-based payments in online shopping, offline retail stores and for P2P payments, the company expects a steady growth in digital payments in the future. It states, “In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function, and have been considering entry into the cryptocurrency exchange industry as the Rakuten Group.”
Acquisition to Support Diversified Services
Rakuten has been accepting bitcoin payments since it integrated its U.S. online portal with Bitnet, a leading bitcoin payment processing firm in 2015. The company also launched its own loyalty-based Rakuten Coin crypto tokens in February, according to CoinDesk. (See also: Why Did Yahoo Japan Buy In to a Crypto Exchange?)
The acquisition is expected to bolster Rakuten's services ecosystem. Everybody's Bitcoin platform will benefit from Rakuten’s assistance in enhancing its infrastructure to improve its security, promote cryptocurrency business prospects and meet regulator's requirements for obtaining a license. (See also: A Look at the Most Popular Bitcoin Exchanges.)
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By Shobhit Seth | September 4, 2018 — 6:00 AM EDT