Back in December 2017, SBI, which established its own cryptocurrency exchange after receiving license from regulators, made its first investment in LastRoots. SBI, however, did not reveal the amount invested in LastRoots, which had to undergo a total revamp of its business model under regulator’s pressure.
SBI holdings has made the following comment regarding its plan for LastRoots
“We are preparing to strengthen our in-house team to register the virtual currency exchange business.”
Following the Coincheck’s $530 million hacking incident in January, the Japanese regulators made a thorough review of the security arrangements employed by cryptocurrency exchanges for safeguarding their clients’ crypto holdings. LastRoots, which fell short of regulator’s expectations, had to undergo sweeping changes to the manner in which it was conducting its business operations in order to retain the cryptocurrency exchange license.
Following the second round of investment, SBI has mentioned that it will support LastRoots to become regulatory compliant by employing its staff to nurture industry standard practices. SBI has specifically stated that its executives will “strengthen the management system… support the cryptocurrency exchange business registration [process] and business growth.”
Notably, a week before, Japan’s Financial Services Agency (FSA), which monitors the operations of cryptocurrency exchanges and licensing process, announced the outcome of its on-site inspections, which have been going on for the past few months. The FSA is now ready to accept applications from new cryptocurrency exchange operators. The regulator has stated that new exchanges will face increased scrutiny from the beginning.