bitbank Cryptocurrency Exchange
bitbank, Inc. runs one of the first and largest cryptocurrency exchanges in Japan. It has been part of the initial batch of eleven exchanges approved by the Financial Services Agency in September 2017 (see “The Japan Crypto Sixteen”), and obtained license number 00004.
Originally founded as bitcheck, Inc. in May 2014, in the same month it installed Japan’s first bitcoin ATM in Nishi Azabu, Tokyo, and introduced a “bitcheck wallet service” to facilitate bitcoin purchases by credit card. In September 2014, Japan’s first bitcoin payment service “bitcheck pay” was introduced. The company subsequently changed its name to bitbank, Inc. and launched the following services:
- bitbank Trade, a BTCUSD futures exchange, commenced trading in October 2014
- BTCN, a cryptocurrency media business, launched in October 2014
- Blockchain Daigakko, a blockchain and cryptocurrency education business, launched in June 2016 — this is the only service established as a 100% subsidiary
- bitbank, the cryptocurrency exchange, trading XRP, BTC, BCH, ETH, LTC and MONA, went live in March 2017 and was officially licensed in September 2017 — while bitbank also received a business improvement order after the FSA inspections that followed the Coincheck hack, it appeared to have a relatively stronger position, including clean segregation of customer assets (see “Details of Japan crypto exchange sanctions”)
It is interesting to note that Japanese rewards points powerhouse Ceres holds 29.9% of bitbank, Inc., through an investment of JPY 850m made in July 2017 (USD 7.7m at the time). With some commentators viewing rewards points as a form of digital currency, this moves allows for optionality in the future, similar to Rakuten’s move in acquiring Everybody’s Bitcoin at the end of August 2018. Since Ceres is publicly listed (TSE:3696) with a market capitalization of less than USD 200m, this allows any investor to take a stake in a cryptocurrency exchange business.
bitbank has always been a high volume XRP exchange. In October 2018, the XRP/JPY trading pair was making up more than 80% of the total exchange volume. This has now normalized to a little over 50%, with bitcoin trading representing about a quarter. Despite the global cryptocurrency bear market, overall monthly trading volume has held relatively stable, from approximately USD 3.1bn in September 2018 to USD 2.9bn now, making bitbank a Top 30 cryptocurrency exchange.
Given the large industry around retail FX trading in Japan, bitbank Trade provided an early entry to cryptocurrencies for players used to acting with significant leverage — up to 25x. The company’s website is still promoting the higher volatility of cryptocurrencies compared to traditional FX as a virtue.
Founder and Chief Executive Officer Noriyuki Hirosue previously served on the Board of Directors of GMO Internet Group before founding the car share company COMUCA in 2008 and selling it to Japanese conglomerate Mitsui. Early in his career, Hirosue-san worked for Nomura Securities. He graduated from Waseda Universtiy with a Bachelor of Science degree.
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