Yahoo Japan Buys 40% Stake in Cryptocurrency Exchange BitARG

The deal is estimated at up to USD 28 million

by Deyana Laguna
13 April • 2 min
In Markets

Yahoo Japan Corporation said on Friday it has bought a 40% stake in cryptocurrency exchange BitARG Exchange Tokyo, confirming earlier media reports of the internet giant’s intentions to join the digital money industry.

The acquisition will be carried out through Yahoo Japan’s wholly-owned subsidiary Z Corporation. Financial terms of the deal have not been disclosed but according to an unnamed source cited by Reuters, the transaction would likely be worth around JPY 2 billion to JPY 3 billion (USD 18.6 million to USD 27.9 million).

The transaction will allow Yahoo Japan to launch its own cryptocurrency exchange in the autumn. The structure of the platform would be newly built but based on BitARG’s system.

"By utilizing the service operation and security expertise of the Yahoo group, we support the operation of exchanges operated by BitArgo Exchange Tokyo," Yahoo Japan said, adding that it will aim to provide services that are "easy to use and safe”.
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Rumors of the acquisition first emerged in March, though at the time they indicated that Yahoo Japan would make the investment through its forex transaction platform, YJFX. Last month, BitARG denied the reports, saying that "various possibilities" were being explored.

BitARG was established in May 2017 and temporarily suspended its service in August 2017. As of April 13, the exchange has not resumed operations, according to Business Insider Japan. In December 2017, BitARG received a license from Japan’s regulatory watchdog, the Financial Services Agency (FSA), to carry out crypto trading operations in the country.

The FSA has been inspecting all cryptocurrency exchanges in the country and actively issuing business improvement and business suspension orders, following January’s USD 530 million-worth hack of local cryptocurrency exchange Coincheck. Six companies have already withdrawn their applications to operate crypto exchanges in the country.

Yahoo Japan’s move follows another notable purchase by Japanese online brokerage firm Monex Group, which last week announced the USD 34 million acquisition of embattled Coincheck. The deal saw Monex join other financial services providers such as larger peer SBI Holdings Inc and messaging app operator Line Corp in shrugging off security concerns and joining the crypto ecosystem.