Japanese financial services group SBI has acquired digital currency exchange TaoTao, just days after TaoTao ended a commercial relationship with Binance.
In an announcement, TaoTao confirmed it has become a wholly owned subsidiary of the group’s SBI Liquidity Market. It comes after SBI acquired 100% of the shares in TaoTao for an undisclosed sum from Z Fund No. 1 Investment (formerly Yahoo Japan).
TaoTao had been locked in negotiations with Binance to establish a strategic partnership, with discussion ongoing from January 2020. The move would have enabled Binance to gain a foothold in the Japanese market through TaoTao’s license and market position.
It is not clear why the negotiations between the firms broke down, and neither company has publicly commented so far on the breakdown in relations—although Binance’s attitude towards money laundering and other criminal activities may have put a dampen on the talks. Read CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
A spokesperson for SBI said the firm would make “maximum use” of TaoTao’s market position in growing their business: “We will make maximum use of…the customer base and service know-how of the crypto assets that TaoTao has cultivated so far.”
In joining SBI, TaoTao will now operate alongside SBI’s own digital currrency exchange, SBI VC Trade, which also holds a license to operate in Japan. It is thought that the acquisition is an attempt to establish a more dominant market position within Japan’s digital currency sector, with the combined entity now a more sizable force to be reckoned with.
It comes following the decision in Japan to implement a licensing system for digital currency exchange operators and other businesses in the sector. Today, there are a total of 26 licenses issued in Japan for digital currency exchanges, with SBI now holding an additional license via the TaoTao acquisition.
The deal comes at a time of increasing interest in digital currency for consumers and businesses in Japan, as the country fosters its domestic digital currency industries to encourage growth and innovation.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.