Canada-based Coinsquare is planning to launch a cryptocurrency exchange in Japan. As one of Canada’s largest digital currency exchanges, Coinsquare processes $5 billion of trading volume per year and has 100,000 users.
Now, Coinsquare seeks to branch into Japan. The move involves a partnership with blockchain investment bank DLTa21. Coinsquare is seeking inroads into Asia, and they see Japan as a key market in which to launch a crypto exchange.
The move comes as Japanese regulators investigate some of the country’s largest cryptocurrency exchanges. Japan’s struggles with bitcoin exchanges began in 2014 with the hacking attack of Mt. Gox. More recently, Japanese regulators have investigated large exchanges after hackers stole millions in some of the world’s biggest losses of cryptocurrency.
Coinsquare, dubbed “Canada’s Coinbase” by some, said in a statement Tuesday that it has applied to Japan’s financial regulator to operate an exchange under the DLA21X brand. The application is currently under review, although Coinsquare is confident its venture would pass without hitches.
The new partnership involves combining Coinsquare’s crypto platform technology with DLTa21’s Japan and Canada-based team of experts in trading, compliance, blockchain, and distributed ledger technologies (DLT).
Coinsquare raised $23.63 million in a funding round earlier this year. The exchange has scheduled a $120 million IPO in September. Money raised during that IPO will be used to partially finance overseas expansion. Today, Coinsquare claims it processes about $5 billion in cryptocurrency trades per year with 100,000 customers.
Japan, meanwhile, presents a lucrative market for the Canadian exchange. Japan is seen as a global cryptocurrency capital, with massive trading volume on local exchanges. 2017 was a major year for Japan’s cryptocurrency exchanges, and Japan’s Financial Services Agency (FSA) recently confirmed that approximately 3.5 million investors across Japan hold at least one cryptocurrency.
Competition is heating up among Japan’s cryptocurrency exchanges. However, the competition has come amidst hacks, disruptions, delays, and other issues. Earlier this year, Japan-based Coincheck suffered a hack where they lost over $530 million in customer funds.
Japan’s regulatory authorities, meanwhile continue to challenge exchanges to prove their security credentials. With each new hack, Japan’s regulatory authorities continue to press exchanges for higher standards. These standards have forced several crypto ventures to leave the Japanese market in fear that they’re unable to meet the regulator’s “endless demands”, as reported by Finance Magnates.
Nevertheless, where some exchanges see issues, other see an opportunity, Cole Diamond, CEO of Coinsquare, explained that,
“Japan is a unique market and we’re looking forward to offering our platform’s capabilities to the Japanese market.”
Meanwhile, Matthew Hornor, Executive Chairman of DLTa21, said,
“In addition to fast-growing interest in Japan to develop world-class decentralized applications on the blockchain (dApps), Japan reportedly accounts for the majority of global bitcoin trading. DLTa21 is committed to offering Japan’s 3.5 million plus cryptocurrency exchange traders truly world-class solutions and security.”
Stay tuned for more information about Coinsquare’s Japanese partnership as the project moves forward.