Trent Rhode
BitFlyer, Japan’s biggest cryptocurrency exchange, is planning an IPO, signaling the potential end of the cryptocurrency winter if Japanese buyers reenter the market in a major way. Yuzo Kano, the co-founder of BitFlyer, is looking to return to the CEO position to guide the exchange through the Bitflyer IPO and put an end to the dispute with management and other shareholders regarding control of the company.
At a shareholder’s meeting next month, Kano plans to present his proposal for his reinstatement, setting the stage for the first-ever IPO by a cryptocurrency exchange in Japan. I will make it capable of fighting on the international stage,” Kano said in a recent interview.
Leading up to the BitFlyer IPO, the company has faced several difficulties since its inception in 2014. In 2018, the Japanese Financial Services Agency ordered BitFlyer and several other crypto exchanges to implement more strict measures against money laundering. Kano resigned from his position soon after in 2019.
Several CEOs have tried to lead BitFlyer since then. However, some of them quit after Kano pointed out their weaknesses.
Kano has plans to establish a token-issuance operation, introduce stablecoins, and potentially open BitFlyer’s Miyabi blockchain technology to the public, aiming to strengthen the exchange’s business. The IPO would allow stakeholders to sell their shares and receive remuneration.
Japanese PM #FumioKishida is embracing #blockchain tech for NFTs, DAOs & digital yen. A govt task force is discussing regs to ensure safe & secure use. #Fintech #Japan is ready to reap the benefits of #crypto! #Web3 #Regulation #Cryptocurrency
— Krypton AI (@KryptonAi) February 2, 2023
Despite the challenges, BitFlyer has over 3 million accounts, handling more Bitcoin transactions than any other exchange in Japan. In comparison, Kraken has decided to close its Japan business, while Coinbase has also said that it will shut down most of its operations in the country.
Kano stated that Japan lags behind in the cryptocurrency space but has an opportunity to be an example to other countries, thanks to Bitflyer’s IPO and the updated cryptocurrency regulations. “There are very strict regulations in place now to protect customers, which can be a model for the rest of the world,” Kano said.
In 2021, Kano blocked a deal to sell the exchange because he suspected that a Singapore-based fund was working with management to shut him out. He found other firms willing to pay more for BitFlyer and was ready to exercise his right to choose a buyer.
Kano stated that ACA Partners had approached him with a proposal to buy BitFlyer, which initially valued the exchange at ¥40 billion. However, talks broke down after ACA declined to formalize its offer, even though other potential buyers had emerged and indicated they could pay more.
Kano is confident that he will receive approval to return to the CEO position, calling it the “simplest” solution. However, the challenge of winning approval might be significant, given his role in the exchange’s previous turmoil and the failed acquisition by ACA leading later to the announcement of Bitflyer’s IPO.
As of last year, BitFlyer had a net income of ¥12.5 billion, which was a substantial jump from the previous year’s ¥427 million. Despite this, Kano has pointed out that innovation has stopped, and the exchange is not seizing new business opportunities.
Although Kano is not in charge of BitFlyer currently, he is the CEO of BitFlyer Blockchain Inc., a subsidiary of the exchange. Masaaki Seki is the current president of the larger entity, backed by other shareholders.
The cryptocurrency space remains highly competitive and volatile, and the BitFlyer IPO and updated Japanese crypto regulations could be a significant step forward for Japan’s cryptocurrency industry, and some hope the wider crypto markets in general, by extension.
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This article was written for Business 2 Community by Trent Rhode.
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