Rakuten, one of the biggest players in the Internet & catalog retail industry with the revenue of around $10 billion, and the holder of 107th place on Forbes Top Regarded Companies list, issued a press release informing the public of its intention to launch a cryptocurrency (regarded in the documents as the virtual currency) exchange by the end of this month.
The exchange will operate under the auspices of Rakuten Wallet Inc., which is a consolidated subsidiary of the parent company. Rakuten Wallet will operate as the virtual currency exchange service provider in full concordance with the Payment Services Act.
For your information, the Payment Services Act is a law, which was passed by the government of Japan in April of 2017, following the infamous hack of a Japanese cryptocurrency exchange Coindesk that resulted in a theft of more than $500 million. It was preceded by the prolonged debate ignited by the disaster that happened to Mt.Gox which was consistently troubled by security breaches and thefts until it filed for liquidation in April 2014.
The framework of the law provided for the introduction of a new registration system designed specifically for entities engaged in exchanging crypto to JPY and other fiat currencies, and legalized cryptocurrencies by granting them a status of a payment instrument.
However, the legalization of cryptocurrencies was accompanied by the toughening of requirements concerning the adherence to the anti-money laundering legislature, the rigorousness of the KYC procedures as well as the enhancement of cyber threat resistance capabilities and the necessity to undergo annual audits. Moreover, under the Payment Service Act, all Local Finance Bureaus had to issue the so-called ‘business improvement orders’. Rakuten received such an order from the Bureau of the Kanto province in the spring of last year, following its acquisition of the cryptocurrency exchange platform which at that time operated under the name Everybody’s Bitcoin.
Last year, Rakuten acquired the unlicensed Japanese cryptocurrency exchange Everybody’s Bitcoin, which at that time has been operating as a ‘deemed cryptocurrency exchange’ awaiting the approval of the registration application by the local authorities. As reported, the deal cost the e-commerce colossus a mere 265 million JPY or $2.5 million.
On September 7, 2017, after the deal had been concluded, Rakuten filed a separate application with the Kanto Local Finance Bureau to acquire the right to operate as the virtual currency exchange.
On April 25, 2018, the same Bureau issued a business improvement order which specified that Rakuten is ought to reform in the management system of the exchange, formulate an advanced business plan, and improve the internal supervisory system.
Once all these requirements had been met and the license obtained, Rakuten announced that they will be rebranding Everybody’s Bitcoin to Rakuten Wallet and ceasing all operations carried out within the framework of the old exchange by the end of March.
Rakuten declared that they won’t be transferring the user accounts from Everybody’s Bitcoin to the new platform hence the user will have to create new accounts in order to use the Rakuten Wallet.
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