Preparations for Launching a Cryptocurrency Trading Business

「BPJ ended the provision of cryptocurrency leverage trading services (over-the-counter cryptocurrency-related derivatives trading) on 22 December 2021 and discontinued its Type I Financial Instruments Business on 29 December of the same year.」

「At a meeting of BPJ’s Board of Directors held on 12 November 2021, the company resolved to discontinue the Type I Financial Instruments Business relating to the service because it would end the provision of cryptocurrency leverage trading services (over-the-counter cryptocurrency-related derivatives trading) by 29 December 2021, and to undertake the procedures for discontinuing the Type I Financial Instruments Business.」

「On 10 May 2021, the company was registered as a Type I Financial Instruments Business Operator under the Financial Instruments and Exchange Act.」

「Following the launch of the new system in August 2020, the company was able to substantially increase customer trading. Combined with the overall rise in cryptocurrency prices and the addition of a new cryptocurrency, the first such listing in Japan, this stimulated exchange-based trading, where a certain spread could be secured. As a result, revenue improved substantially compared with the previous consolidated fiscal year, when the unauthorized cryptocurrency outflow occurred.」

「During the six-month period ended the second quarter of the current consolidated fiscal year, the company operated its services with priority given to customer awareness and usage promotion rather than revenue, following the launch of a new system in August 2020. Although customer trading volume increased as a result, the company was unable to increase revenue.」

「The company also views this as an opportunity to pursue new businesses, including cryptocurrency custody and STOs, short for Security Token Offerings, which are expected to provide new means of financing.」

「On 11 July 2019, an unauthorized outflow of cryptocurrency occurred at the cryptocurrency exchange operated by BPJ, and all services were temporarily suspended. The company implemented measures to prevent recurrence, focusing on identifying the cause and strengthening security measures, and resumed services for fiat-currency deposits and withdrawals, margin trading, spot cryptocurrency trading, cryptocurrency transfers and receipts, and new account-opening applications in sequence by 25 December of the same year. As a result, customers were able to use all services provided by BPJ before the unauthorized outflow occurred.」

「On 11 July 2019, an unauthorized outflow of cryptocurrency occurred at the cryptocurrency exchange operated by BPJ, and all services were temporarily suspended. The company implemented measures to prevent recurrence, focusing on identifying the cause and strengthening security measures, and resumed services for fiat-currency deposits and withdrawals, margin trading, spot cryptocurrency trading, and cryptocurrency transfers in sequence during the second quarter of the current consolidated fiscal year.」

「In January 2019, the company established Smart Financial Co., Ltd. for the purpose of conducting Type I Financial Instruments Business and sought to expand financial-related services across the group.」

「To achieve “safe and secure cryptocurrency trading,” BPJ regards strengthening its management control framework as its highest priority. It enhanced its governance functions by reviewing its corporate governance structure and transitioning to a company with an audit and supervisory committee, and improved the reliability of transactions by obtaining an information security rating and implementing a robust security system. It also began offering BITPointAdvance, a cryptocurrency trading tool with enhanced functionality, and added Bitcoin Cash (BCH) as a settlement currency in BITPointPay, a merchant payment app, among other measures to improve user convenience.」

「The company also began offering BITPointAdvance, a cryptocurrency trading tool with enhanced functionality, and added Bitcoin Cash (BCH) as a settlement currency in BITPointPay, a merchant payment app, among other measures to improve user convenience. As a result, the segment recorded revenue of ¥2,140 million, up 331.7% year on year, due to increased software sales revenue from overseas white-label services, and segment profit (operating profit) of ¥1,015 million, up 211.9%.」

「In the financial-related business, BPJ, which is registered as a cryptocurrency exchange service provider, operates a cryptocurrency exchange and provides spot trading services as a cryptocurrency exchange business, as well as margin trading services (leverage trading services and FX trading services) as a cryptocurrency-related business. As a result, the segment recorded revenue of ¥906 million, up 229.9% year on year, and segment profit (operating profit) of ¥530 million, up 157.1%.」

「Under these circumstances, BPJ entered into multiple business alliances, including the development of overseas operations, and steadily increased the number of accounts opened. It also continued to invest in strengthening trading-system functionality and security measures and developing applications. By clearly positioning itself as a cryptocurrency exchange prioritizing safety and security, the company substantially expanded its results.」

「In the financial-related business, consolidated subsidiary BitPoint Japan Co., Ltd. (hereinafter, “BPJ”) operates cryptocurrency exchanges and provides cryptocurrency exchange services, cryptocurrency leverage trading, cryptocurrency FX trading, and cryptocurrency transfers. BPJ was registered by the Financial Services Agency as a cryptocurrency exchange service provider on 29 September 2017. BPJ also entered into multiple business alliances, including the development of overseas cryptocurrency exchanges, and steadily increased the number of accounts opened. In addition, it worked to expand and strengthen its services by migrating to a new exchange system with liquidity-pool functionality and offering cryptocurrency FX trading 24/7. As a result, the segment recorded revenue of ¥504 million and segment profit (operating profit) of ¥334 million.」

「BPJ announced multiple business alliances and steadily increased the number of accounts opened as interest in the company grew. It also worked to strengthen its services by migrating to a new exchange system with liquidity-pool functionality and launching 24/7 cryptocurrency FX trading. As a result, the segment recorded revenue of ¥286 million and segment profit (operating profit) of ¥218 million.」

「The company also began offering a white-label cryptocurrency trading platform and worked to establish a business model generating system usage fees and trading revenue from clients, while actively developing alliance partners in Japan and overseas in the cryptocurrency-related business field.」

「In addition, since launching cryptocurrency trading on 23 July 2016, BitPoint Japan Co., Ltd., a non-consolidated subsidiary not accounted for under the equity method, has expanded its service menu and worked to acquire customers and increase trading volume.」

「In addition, BitPoint Japan Co., Ltd., a non-consolidated subsidiary not accounted for under the equity method, began cryptocurrency trading on 23 July 2016, expanded its service menu, and worked to acquire customers and increase trading volume.」

「In addition, BitPoint Japan Co., Ltd., a non-consolidated subsidiary not accounted for under the equity method, made intensive preparations to launch cryptocurrency trading in late July 2016, including system development and the establishment of an internal control framework.」