Japanese online trading giant Monex has announced the acquisition of local cryptocurrency exchange Coincheck. The deal is worth $33.5 million (360 million yen), a figure that offers a glimpse into the value of cryptocurrency exchanges.
The takeover agreement is largely a confirmation of rumors that have been circulating across the market for a couple of days. According to an official announcement issued by Monex, the deal is a testament to the importance of blockchain technology and cryptocurrencies in the financial space.
The Right Deal at the Right Time?
Japanese exchange Coincheck has been mandated by the Kanto Local Finance Bureau, which is the local regulator overseeing financial firms to enhance its governance and internal control. The synergies between Monex Group and the cryptocurrency exchange are beneficial for both companies starting from the fact that Coincheck was in desperate need of capital and experienced financial markets executives.
The firm’s troubles began with the largest theft in crypto history, when over $530 million worth of the cryptocurrency NEM got stolen. Monex elaborated that the teams of the companies are committed to building a secured business environment for their customers. Top Monex executives are joining the effort, confirming previous reports by Nikkei.
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The COO of Monex Toshihiko Katsuya has been charged with the management of the new cryptocurrency business of Monex. Masaki Ueda, who was previously in charge of Monex Zero is now going to fully commit his time to Coincheck. The Group’s CEO Oki Matsumoto will be taking over Ueda’s responsibilities with Monex Zero.
Use of Synergies
Monex has committed to maximizing the use of the company’s expertise and human resources to better the business administration, system risk management, and customer asset protection systems at Coincheck.
At the same time, the company plans to integrate Coincheck’s knowledge on blockchain technology and cryptocurrencies to accelerate the “MONEX’s new beginning” plan. Coincheck will also be recapitalized in accordance with the recommendations of the Japanese financial regulators.
Glimpse into Crypto Operations
The deal between Coincheck and Monex offers a rare glimpse into the operations of the cryptocurrency exchange. The company’s latest report for the fiscal year that ended in March 2017 shows that at the time before the cryptocurrency boom escalated, it had a total of $7 million (786 million yen) of operating income with the net income figure amounting to $4.4 million (471 million yen).
Trading volumes for the same period appear to have amounted to about $719 million (77.3 trillion yen). Once again, this figure is before the real dawn of the cryptocurrency boom that started after the end of the reporting period in March 2017.