[NEWS] Zaif to end cryptocurrency FX and abolish Type 1 financial instruments business

On the 1st, domestic cryptocurrency exchange Zaif announced that it would end its cryptocurrency FX business. Accordingly, Kaika Exchange, which operates Zaif, will also cease its Type I Financial Instruments Business on July 31, 2023.

However, Kaika Exchange will continue to provide spot cryptocurrency trading services as a cryptocurrency exchange business under the Payment Services Act.

Kaika Exchange registered as a Type I Financial Instruments Business in June last year, which is required to provide leveraged cryptocurrency trading and futures trading.

In Japan, it is possible to provide spot cryptocurrency trading services by registering as a cryptocurrency exchange business.

On the other hand, cryptocurrency derivatives trading became subject to regulation under the Financial Instruments and Exchange Act when the revised Financial Instruments and Exchange Act came into effect in May 2020, and therefore it became necessary to register as a Type I Financial Instruments Business.

Zaif offered two cryptocurrency FX pairs, Bitcoin (BTC/JPY) and Ethereum (ETH/JPY).

Kaika Exchange has decided to suspend its cryptocurrency FX service after much consideration, taking into account recent trends in the cryptocurrency industry.

At the time of writing, there are approximately 300 companies registered as Type 1 Financial Instruments Business Operators nationwide. The process of entering the Type 1 Financial Instruments Business is difficult, requires a budget of hundreds of millions of yen, and annual maintenance costs are said to be tens of millions of yen.

As for the future schedule, Zaif will stop accepting derivatives account openings around 3:00 p.m. on the 12th of this month.

It will stop accepting new cryptocurrency FX orders on the 19th, and will stop accepting cryptocurrency FX settlement orders on the 26th of next month. At the same time, it will also stop accepting transfers of funds between Zaif derivative accounts and Zaif accounts.

Positions remaining after the 26th will be forcibly settled, so caution is required.

References:Announcement 1, Announcement 2
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