Rakuten Acquires Everybody’s Bitcoin for $2.4 Million as Japan Tightens Crypto Exchange Oversight

The Legislative Move

On September 3, 2018, Japanese e-commerce giant Rakuten announces the acquisition of the cryptocurrency exchange Everybody’s Bitcoin for approximately $2.4 million. The deal, executed through Rakuten’s payments subsidiary Rakuten Card, involves the purchase of all 5,100 outstanding shares of the exchange. The move comes at a critical juncture for Japan’s cryptocurrency industry, which is navigating an increasingly complex regulatory environment following the January 2018 Coincheck hack that saw $530 million in NEM tokens stolen from the exchange.

The acquisition is not a casual investment. Rakuten explicitly states that the purpose is to accelerate Everybody’s Bitcoin’s registration as an official cryptocurrency exchange under Japan’s Payment Services Act, which was amended in April 2017 to require all crypto exchanges operating in the country to register with the Financial Services Agency (FSA). The message is clear: Japan’s largest e-commerce company sees cryptocurrency as a strategic pillar, but only within the boundaries of regulatory compliance.

Jurisdiction Context

Japan holds a unique position in the global cryptocurrency regulatory landscape. After the collapse of Mt. Gox in 2014 — when approximately 850,000 Bitcoins vanished from what was then the world’s largest exchange — Japan became one of the first major economies to establish a comprehensive regulatory framework for digital assets. The amended Payment Services Act, which took effect in April 2017, recognized Bitcoin as a legal payment method and mandated that all cryptocurrency exchanges register with the FSA.

By September 2018, the FSA has been aggressively enforcing these requirements. Following the Coincheck incident, the regulator conducted on-site inspections of all registered exchanges and issued business improvement orders to several platforms that failed to meet security and anti-money laundering standards. The regulatory climate has become decidedly stricter, with the FSA demanding robust internal controls, adequate cybersecurity measures, and rigorous customer identification procedures.

For Everybody’s Bitcoin, this regulatory pressure has been particularly acute. The Kanto Local Finance Bureau has issued the exchange a business improvement order specifically targeting its management control systems. The order requires the exchange to enhance its anti-money laundering and counter-terrorism financing protocols, improve book management systems, strengthen user protection measures, address system risk control deficiencies, and better manage the outsourcing of business operations.

Industry Reaction

Rakuten’s entry into the cryptocurrency exchange market is being met with cautious optimism by industry participants. The company is not just any e-commerce platform — with over 100 million members in Japan and a sprawling financial services ecosystem that includes credit cards, banking, insurance, and securities, Rakuten represents the kind of established corporate infrastructure that could bring credibility and scale to the crypto industry.

In a company statement, Rakuten frames the acquisition as a strategic alignment: “Rakuten Group decided to acquire Everybody’s Bitcoin shares so that it can realize the early registration as a cryptocurrency exchange and develop cryptocurrency services to customers by combining the know-how of Everybody’s Bitcoin as a cryptocurrency exchange, and the know-how of Rakuten Group as a provider of various financial services.” The implication is that Rakuten’s experience in regulated financial services will help elevate Everybody’s Bitcoin’s compliance posture to meet FSA standards.

The broader market context is also relevant. Bitcoin is trading at approximately $7,272, down significantly from its December 2017 highs near $20,000. The extended bear market has thinned the ranks of cryptocurrency exchanges globally, with many smaller platforms shutting down due to declining volumes and regulatory costs. Rakuten’s willingness to enter the market during a downturn is being interpreted as a long-term strategic bet on the viability of digital assets.

Compliance Hurdles

The path to full FSA registration is not guaranteed. Everybody’s Bitcoin must demonstrate that it has addressed all the deficiencies identified in the business improvement order before its registration can be finalized. This requires significant investments in compliance infrastructure, including enhanced know-your-customer (KYC) procedures, transaction monitoring systems, and cybersecurity protocols.

The FSA has shown zero tolerance for half-measures. Since the Coincheck hack, the regulator has rejected several exchange registration applications and ordered some platforms to halt operations entirely. The bar for approval has been raised substantially, and the FSA is conducting follow-up inspections to verify that previously ordered improvements have been implemented.

For Rakuten, the compliance challenge is compounded by the need to integrate Everybody’s Bitcoin’s existing systems with its own financial infrastructure. The company must ensure that its broader ecosystem — including its credit card, banking, and securities operations — is not exposed to cryptocurrency-specific risks, including price volatility, hacking, and money laundering. Japanese regulators are likely to scrutinize the interconnections between Rakuten’s crypto operations and its traditional financial services closely.

What’s Next

Rakuten’s acquisition of Everybody’s Bitcoin is likely to accelerate a broader trend of consolidation in Japan’s cryptocurrency exchange market. As regulatory costs rise and smaller exchanges struggle to maintain compliance, larger financial institutions and technology companies with existing regulatory expertise are positioning themselves to absorb or replace them. This consolidation could ultimately benefit the industry by raising standards and building consumer trust.

The move also raises questions about the future relationship between traditional e-commerce and cryptocurrency. Rakuten has previously invested in blockchain-related ventures, including a $20 million Series C round in money transfer platform Azimo earlier in 2018. The company’s interest in crypto extends beyond trading — there are indications that Rakuten is exploring the use of cryptocurrency for payments within its ecosystem, potentially creating a bridge between digital assets and everyday consumer transactions.

For the Japanese regulatory framework, the Rakuten acquisition represents a test case. If one of Japan’s most prominent companies can successfully navigate the FSA’s registration requirements and launch a compliant cryptocurrency exchange, it could serve as a template for other large enterprises considering similar moves. Conversely, if compliance proves more challenging than expected, it could dampen institutional enthusiasm for entering the crypto market.

As September 2018 unfolds, the crypto industry is watching Japan closely. The country’s approach to regulation — strict but permissive, with clear rules and active enforcement — is emerging as a potential model for other jurisdictions grappling with how to oversee digital asset markets without stifling innovation.

Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. Cryptocurrency regulations vary by jurisdiction and are subject to change. Always consult qualified professionals before making investment or compliance decisions.