Yahoo-backed Japanese Crypto Exchange Taotao Goes Live

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Taotao, a Japanese crypto exchange Taotao backed by Yahoo Japan, is to launch its services today May 30, according to a timeline the firm provided at the beginning of this week.

The launch of Taotao means that Yahoo Japan is making an entry into crypto when the market appears to be on an upturn. And it is likely to play a big role in what is a complex Japanese crypto market.

The platform first hit the crypto news circles in March 2018, with reports saying the internet giant Yahoo Japan would acquire a 40% stake in Tokyo-based crypto exchange BitARG.

The report cited sources as saying that the corporation would then look to launch its own crypto platform in April this year, or somewhere around that time.

BitARG denied it had plans for such a deal at first, but later on, confirmed the acquisition was taking place, but both BitARG and Yahoo Japan confirmed the acquisition. The deal cost the internet firm an estimated 2-3 billion yen, or between $19- $27 million.

Users began signing up for accounts this March, with a planned launch in mid-May postponed before the latest announcement noted its rollout date to be May 30 at noon.

At the moment, the exchange is open to users within Japan only, according to the company.

Exchange is cleared by the FSA

By the time Yahoo Japan’s YJFX acquired BitARG, the exchange already had clearance from Japan’s regulator the Financial Services Agency (FSA). The license allowed the platform to offer its crypto trading services in the country. Issued in December 2017, the license passed on to Taotao.

The Payment Services Act amendments of April 2017, introduced a requirement that all platforms that operate as digital currency exchanges get regulatory approval from the FSA. The acquisition, therefore, was an easy way for Taotao to land itself approval given the stringent rules the FSA subjects crypto exchanges to in the country.

Although those exchanges that are most compliant have the licenses, as many as 190 were on the FSA’s pending list by December last year.

The stringent measures are not surprising at all when juxtaposed with the fact that Japan has witnessed two of the largest hacks on cryptocurrency exchanges.

Coincheck was hacked in January 2018, with attackers stealing crypto worth $532 million. But the most notorious hack happened at the defunct Tokyo-based crypto platform Mt.Gox, whose victims are in the process of being compensated.

It is the tough supervision the regulator has enforced since last year that pushed major crypto exchange Binance to open its offices in Malta, seen as a more crypto-friendly destination.

Taotao is also a member of the self-regulatory group Japan Virtual Currency Exchange Association (JVCEA).

Great time to make an entry, but who are Taotao’s rivals

The new exchange will initially allow customers to trade the top two cryptocurrencies in the market in bitcoin (BTC) and ether (ETH). The platform’s website also notes that it will offer margin positions for bitcoin cash, litecoin (LTC) and XRP.

Taotao’s launch comes at a time the number of entry-level account openings has reportedly been on the rise amid renewed interest in crypto among Japanese investors. Major trading platforms have recorded up to 200% surge in new accounts between March and May, with the highest seen at DMM Bitcoin, Bitpoint and Coincheck.

The positive momentum in place due to the bull market appears to be drawing new investors, a fact that could benefit Taotao. The challenge for the new exchange remains the competition offered by established platforms.

Bitcoin is on a bull run, and the market cycle will likely see it post even higher price gains. Amid these positive moves, top Japanese exchanges like bitFlyer and Liquid won’t just lose their spot to a new entrant.

More competition is also likely to come from U.S.-based Coinbase (once it gets FSA approval), Rakuten Wallet by e-commerce giant Rakuten and BitBox, a crypto exchange owned by communications giant Line Corp.

But Taotao’s position at Yahoo Japan gives it an equally huge opportunity to leverage the tech juggernaut’s vast digital footprint to lure most of the new customers.


Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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