Money Forward Delays Entry into Cryptocurrency Businesses

Money Forward, Inc. announced on April 15 that it has delayed plans to enter cryptocurrency businesses and aborted its application to register as a cryptocurrency exchange.

 

On May 23, 2018, the company announced the establishment of Money Forward Financial, Inc. as its wholly owned subsidiary for conducting businesses related to blockchain and cryptocurrency as a quasi-operator. Money Forward Financial had planned to register as a cryptocurrency exchange operator. In February 2019, Money Forward Financial registered as a Type II member of the Japan Virtual Currency Exchange Association (JVCEA), a self-regulating body for the cryptocurrency business. Type II members are those that have applied to become a cryptocurrency exchange or plan to apply.

 

Money Forward said its decision was based on the rapid cooling of the cryptocurrency market and that the downside risks of continuing the business until it became profitable were too high. It added that the cost

had become too high to create a system to protect users’ assets and secure their operability in response to the increased international debate about cryptocurrency leaks and money laundering.

 

Following this decision, Money Forward halted the development of cryptocurrency exchange system and announced to end Onbit blockchain and cryptocurrency media service on May 31, 2019.  It will apparently continue research into blockchain technology development. Money Forward also reported that it had recorded an extraordinary loss of \61.39 million for the first quarter of the fiscal year ending November 30, 2019.

 

Money Forward’s stock price plummeted following the announcement. It started off with a quotation price due to the recording of extraordinary loss and significant loss in operating profit for the first quarter.

 

Despite this, large companies have continued to open cryptocurrency exchanges one after another in Japan since the start of April. DeCurret Inc., whose investors include major railroad operator East Japan Railway Company and MUFG Bank, Ltd., started providing a cryptocurrency exchange service from April 16.

 

The major FX and securities trading firm MONEY PARTNER GROUP CO., LTD. is also expected to establish a wholly owned subsidiary that primarily operates as a cryptocurrency operator in May. TaoTao, Inc., a cryptocurrency exchange with investment from Yahoo Japan Corporation is expected to launch in May as well. Moreover, Rakuten Wallet, Inc., a cryptocurrency exchange under the umbrella of the major e-commerce and internet service firm Rakuten Inc., announced that it will launch a cryptocurrency service in Japan from June.

 

*This article was written by Fisco