SBI Group, one of Japan’s largest financial institutions, is backing a cryptocurrency exchange that is being watched by the country’s Financial Services Agency (FSA). Through its SBI Holdings subsidiary, the bank has invested in the LastRoots exchange for an unspecified amount, the second large injection of cash made by the company. It previously pulled out its wallet in December of last year to back the exchange.
LastRoots was one of many Japanese exchanges to be cited for discrepancies by the FSA. All of the exchanges have received “business improvement orders” designed to correct deficiencies, with LastRoots having received its notice this past April. The FSA determined that the exchange was not doing enough to protect its users from possible cyber threats.
SBI announced (in Japanese) the investment yesterday, saying that it wants to help the exchange improve its internal systems so that it can eventually become a licensed trading platform. SBI will be providing its own staff to support the company and, together, they will enhance the risk management systems and anti-money laundering policies of the exchange.
SBI has continued to step deeper and deeper into the world of digital currency since this year. This past March, it announced an investment in CoolBitX, a cryptocurrency hardware wallet manufacturer out of Taiwan, and was involved in the $10-million funding round of the Templum token exchange in April.
Last month, SBI began offering crypto trading to the public through its own crypto exchange when it received a license from the FSA. Upon receiving the license, its crypto trading desk became one of the first in the country to be backed by a major financial entity.
LastRoots entered the crypto landscape in 2016. That same year, it launched an initial coin offering (ICO) that saw it attract almost $5.5 million. It offers its own cryptocurrency token called the C0ban. In addition to the exchange, the company also offers a video advertisement scheme that allows users to earn C0ban just by watching video ads.
The exchange’s business improvement order wasn’t as damnifying as those received by other exchanges. Both Eternal Link and the FSHO exchange were temporarily suspended for two months after the FSA determined that they were did not have sufficient Know Your Customer procedures in place. At the end of the suspension, FSHO was denied its request to reopen, making it the first crypto exchange to be given the ax by the FSA. Eternal Link was allowed to continue operating.
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