Money Forward Budget App Stops Crypto Asset Exchange Plans Based On Risk And Profitability
Money Forward Inc Halts Crypto Exchange Plans
It seems no one can fully escape the bear market. Even though it has been ongoing for months and the price of Bitcoin does seem to be improving, its effects are being reported every day. From businesses closing down to employees being removed of their duties, it doesn’t seem to ever end.
The latest firm to suffer from these effects is Money Forward Inc, a Japanese fintech firm, which has announced that they will be shelving plans to Open their own crypto exchange. This is rather unfortunate as the firm had big plans for crypto, even setting up a separate arm of the business for this purpose. Overall, there were plans for a crypto media platform, a crypto exchange, and a digital assets remittance and settlement system.
All these lofty plans are, unfortunately, being put aside and the board of directors of the company have decided to halt to process of registering the exchange.
So far, two reasons have been given for this decision. The first is the bear market. As of the time the crypto exchange was first conceptualized, the price of Bitcoin was much stronger and most felt that it could only go up from there. This, obviously, was not the case as a crash in price took place in late 2018 and the market is still not fully recovered. Whatever profits the Exchange had hoped to make are not the case anymore and the board has decided that it is best scrapped rather than risking a loss.
“The virtual currency market has cooled rapidly and the downside risk of profitability has been increased by continuing the business,” the board said.
This is hardly surprising as many exchanges and mining firms have reported losses for the year 2018 and the firm might want to cut their losses as of now and not join that number.
The second reason the numerous hacks that have taken place at crypto exchanges over the last few months. Exchanges have found themselves either heavily indebted or having to close down after these hacks and the firm wanted to make sure that their customer protections were top-notch if they were to Launch. To cost of setting up these top-both protections proved too expensive and this contributed to the decision to cancel the exchange.
As such, the crypto exchange has been canceled and their crypto media branch will be defunded from May 31, 2019. However, Blockchain research and development will continue as planned.