SBI Holdings, which is the investment arm of the Japan-based financial giant SBI Group, canceled a business partnership with Huobi Group, the Chinese cryptocurrency exchange.
In Friday, SBI Holdings reported that it decided to stop business and capital collaboration with Huobi Group in launching crypto exchanges in the country.
The 2 firms first made the deal in Dec. 2017 in a bid to open 2 crypto exchanges in Japan, named SBI Virtual Currency and Huobi Japan.
In Sep. 2017, the first exchange had completed business registration with the FSA (Financial Services Agency), which is Japan’s regulator. Huobi Group had revealed that the platforms were expected to start operations this month.
However, SBI Holdings said in the latest announcement that it has canceled its original plan to use the technology, human resources and know-how of Huobi in operating the exchanges. Instead, the company has decided to bring the efforts in-house.
In describing the reasons for canceling the deal, SBI Holdings told the company needs a system that responds promptly to overseas and domestic regulations and it incorporates higher levels of security.
Finally, according to the statement, SBI Holdings is going to utilize SBI Group’s own resources in order to build a system with sufficient processing capacity and enhanced security.
The decision follows the FSA’s increased efforts in scrutinizing Japanese exchanges about the security measures, after the hack of $530 million (worth of the NEM cryptocurrency) from the Coincheck exchange 2 months ago.
FSA forces exchanges to implement improved securities measures
Last week, the FSA issued administrative penalties to the domestic platforms that have provided insufficient security measures, in order to protect the investors. Therefore, it is not a surprise that SBI announced that it had postponed the live launch of SBI Virtual Currency regarding the need for further security enhancements.