Japanese fintech firm reverses crypto exchange plans due to bear market
A leading Japanese fintech firm has said it no longer intends to launch a crypto exchange, amid concerns about the underlying health of crypto markets, according to a Cointelegraph report.
Money Forward, Inc., which runs one of the country’s most popular apps for personal and household budgeting, had previously set out plans for a crypto media service, a crypto exchange, and a separate system for remittance and settlement using digital cash.
However, with markets still continuing to languish compared to expectations in 2019, the firm has decided to indefinitely postpone its plans.
In an announcement published by the firm, Money Forward said its board of directors had decided to cancel its application for an official registration of the exchange, citing poor performance over the first quarter of 2019.
It stated, “The virtual currency market has cooled rapidly and the downside risk of profitability has been increased by continuing the business.”
The announcement also reflected on concerns around hacks, and the prevalence of money laundering through crypto exchange.
According to the directors, the costs of setting up consumer protection systems while ensuring a convenient experience for traders were now prohibitive, against ongoing challenges in the crypto bear market.
As part of the announcement, the firm confirmed it would also be halting service provision through its Onbit platform at the end of May, despite a commitment to continue to research blockchain technology.
The news follows on from Money Forward, Inc. become a tier 2 member of the Japan Virtual Currency Exchange Association earlier this year, seen as a precursory step to launching as a registered exchange in the country.
With the announcement, Money Forward, Inc. becomes the latest casualty of the ongoing struggles in crypto markets, led by the decline of Bitcoin Core (BTC).
As investors flee from the legacy cryptocurrency in increasing numbers, the effect on crypto prices more broadly continues to cause problems for industry operators. A number of mining firms, for example, have been forced to shut down facilities and lay off staff, while a number of crypto exchanges have filed for bankruptcy.
With the latest news, Money Forward looks to be attempting to steer clear of these difficulties altogether.
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