Japan’s bitcoin lord Yuzo Kano wants to start the most significant global crypto empire ever. According to , he is trying to gather all the major talents he can get to achieve this.
Yuzo Kano is a former Goldman Sachs alumnus, which was able to turn Inc. into Japan’s largest exchange in just four years, now has ambitious plans to build the biggest global cryptocurrency conglomerate the world has ever seen. For that, he is scooping up for traders and bankers, and he is trying to get them right from his old boss and its rivals.
Kano said:
“My target is to be number one in the world. To get there, I need to grow headcount. And those with the best skills come from global banks.”
bitFlyer Inc. is the largest cryptocurrency exchange in Japan and Kano is also the exchange’s co-founder. Thanks to him, the exchange is already the world’s fourth-largest crypto venue by turnover, after BitMex, Binance, and OKEx, according to .
Kano has been taking advantage of recent Japanese that facilitate the finance-to-crypto leap. As Japan’s virtual currency exchanges are now licensed, it makes the country an ideal base for an increasingly global operation.
The popularity of margin day trading among Japanese traders made transactions on the exchange go around an average of $2 billion a day during late April and early May. bitFlyer also saw the number of users more than triple since 2017.
Setting up a Global Network
Kano already has offices set up in Tokyo, San Francisco, and Luxembourg and has plans to open new offices in Africa, South America, Australia and other parts of Asia.
He’s aiming to deploy a crypto trading to businesses which includes digital payments and a brokerage-advisory service for startups and investors wanting to start their .
Kano, believes former traders and bankers are the best-suited candidates for crypto firms because they know all there is to know on how to operate in regulated markets. As so, he is looking to have a team with representatives in as many countries as possible that can understand the local regulatory contours of the crypto space.
Apart from finance, Kano knows technology matters as well. That is why he is looking for the best candidates through several channels including hackathons or coding tournaments.
Competition Ahead
Kano foresees competition ahead as Wall Street companies are on the tail of this new industry as well. Intercontinental Exchange Inc., the owner of New York Stock Exchange, is planning to launch a platform that enables investors to bet on cryptocurrency while Goldman is preparing to start a bitcoin-trading business. In Japan, financial companies such as Inc. and SBI Holdings Inc. are also going big in cryptocurrency businesses.
Even though the average daily turnover at global crypto exchanges fell to $9.1 billion in April from $17 billion in December as prices for most significant tokens sank more than 50 percent from their highs, is still up more than 1,800 percent on a two-year horizon. The recent performance means that the hype isn’t gone yet and there is plenty of future for the industry to grow.
Up until now, Kano has been able to gather a team of more than 150 experienced professionals that came from Barclays, Credit Suisse Group AG, and many other financial institutions. Kano is having a lot of success with his venture, and the team will much likely surpass 300. If all goes well before 2020 Kano will have his global conglomerate all ready to go.
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The U.S. Patent Office has awarded Winklevoss brothers’ Winklevoss IP a patent for a system to operate exchange-traded products (ETPs) for . The patent, granted by American authorities on May 08, 2018, could be the key to listing a crypto ETP on their exchange .
About the Patent
Records show that Winklevoss IP applied for a on December 19, 2017, to facilitate a system for operating exchange-traded products holding digital currencies. The product explained in the patent application as ETP is similar to an . An Exchange Traded Fund is a tradable security that tracks the price movement of a particular index or industry. ETFs are commonly used by investors to reduce risk and improve probable returns. The ETP as described by the patent will track the price movements of constituent cryptocurrencies.
Since cryptocurrencies are price volatile, an ETP can become an ideal investment tool for reducing price risk. The application states:
“Shares based on digital math-based assets may be redeemed using one or more computers by determining share price information based upon quantities of digital math-based assets held by a trust, electronically receiving a request from an authorized participant user device to redeem a quantity of shares, electronically transmitting a quantity of digital math-based assets from one or more origin digital asset accounts to one or more destination digital asset accounts associated with the authorized participant, and canceling the quantity of shares from the authorized participant.”
The patent defines a digital math based asset as “a kind of digital asset based upon a computer generated mathematical and/or cryptographic protocol that may, among other things, be exchanged for value and/or be used to buy and sell goods or pay for services,” which could be intangible asset not based on any governmental rule.
US SEC Stance on Cryptocurrency Trading and its Products
The SEC has not been supportive of or its derived products. A mutual fund or ETF derives its value from its NAV (Net Asset Value). Dalia Blass, Director of Division of Investment Management at U.S. Securities and Exchange Commission, questioned if a cryptocurrency product would be able to guarantee some basic value. He , “Would funds have the information necessary to adequately value cryptocurrencies or cryptocurrency-related products, given their volatility, the fragmentation and general lack of regulation of underlying cryptocurrency markets, and the nascent state and current trading volume in the cryptocurrency futures markets?”
The SEC had previously, in March 2017, rejected an attempt made by the Winklevoss twin brothers to list a bitcoin tied ETF on the . In a released by the SEC on March 10, 2017 it said:
“the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”
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