Japanese financial services company Monex Group, which has a wide portfolio of brokerages worldwide, is considering to make a big acquisition in the cryptocurrency space, according to a report by the Japanese newswire Nikkei. The report triggered an official response from the firm, stating that no final decision has been made on the matter.
Monex Group’s asset portfolio is focused on providing services mainly to retail clients. The firm’s Japanese subsidiary Monex Inc, along with US TradeStation and Hong Kong-based MONEX BOOM Securities have been well established on the corresponding markets.
As pointed out by none other but the CEO of Binance, Changpeng Zhao, the share price of the Japanese financial services firm spiked higher on the news:
Great to see Monex stock price do this, just on the news of a “likely” acquisition of a crypto exchange. Pretty clear what their shareholders want. pic.twitter.com/RMg36Z3R8C
— CZ (@cz_binance) April 3, 2018
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Earlier this year, Monex set up its own unit, which is focused on cryptocurrencies, to study the opportunities in the sector. Since January, however, cryptocurrency trading has declined materially and a global regulatory crackdown has clouded the future of cryptocurrencies.
The firm outlined in an official statement that Monex has been considering a secure and socially responsible cryptocurrency (crypto-assets) business. The stage of the project, however, has not been confirmed. Apparently, the Japanese brokerage is still considering a variety of ways to enter the cryptocurrency space.
An expansion via acquiring an established player is not out of the question, however, Monex already has vast experience in offering trading products to retail clients. A potential deal might be hinging on the reputation-recovery efforts of Coincheck.
Japanese regulatory evolution
The regulatory crackdown on Japanese cryptocurrency exchanges in recent months was exacerbated by security issues at Coincheck. The Japanese regulators have been increasingly more vigilant towards the sector with the regulatory framework on cryptocurrencies going beyond the basic AML rules that were initially set up.
The events at Coincheck demonstrated that the security area of cryptocurrencies was widely misunderstood by regulators. Capital requirements and stringent supervision of security protocols have been mulled over by the Japanese authorities.
Coincheck was hacked in January when close to $531 million worth of the cryptocurrency NEM were stolen from the company’s wallets.