Japan: ACA Group makes a U-turn with the planned acquisition of BitFlyer Holdings

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Global financial advisory ACA Group has pulled the plug on the proposed acquisition of the Japanese company BitFlyer Holdings. Bitflyer Holdings is the parent company of the BitFlyer digital asset exchange with a substantial share of the Japanese market.

The ACA Group has previously entered into a OK with some BitFlyer shareholders to buy a majority stake in April. At that time, the value of the majority stake was pegged at 370 million yen, or about $370 million, and industry analysts generally expected the deal to go through.

According to a Nikkei report, the deal was canceled by the financial advisory firm with few details shared with members of the public. However, some reports show that BitFlyer’s financial situation is not as rosy as the company paints.

The Tokyo-based exchange recorded a loss of around $6.9 million in 2019 and failed to recover the loss in the years that followed. Falling digital asset prices appear to have hit the business hard as the light of a bull run fades.

Nikkei reports that ACA Group’s intention was not to retain majority ownership. Instead, he planned to sell the holdings once the value rose to make a quick profit. However, unsavory global macroeconomic conditions dampened the enthusiasm of policymakers within the ACA Group.

The plan to buy a slice of the pie isn’t the first time the two companies have crossed paths, as in 2018 the ACA Group spotted a security flaw in BitFlyers’ operations that ultimately led to the theft of funds from the companies. clients. The exchange said it would use its funds to reimburse customers affected by the security breach at nearly 46.3 billion yen ($319.7 million).

Since the incident, the exchange has attracted more than 2.5 million users, but the company faces the difficult task of avoiding competition from Binance as it returns to Japan after nearly four years.

A bad series of botched acquisitions

The failed acquisition of BitFlyer appears to be a symptom of an even bigger problem for the digital asset industry. Since the beginning of the year, there have been numerous reports of botched acquisitions, which often undermine investor sentiment.

Galaxy Digital has ended its planned $1.2 billion acquisition of virtual currency custodian BitGo in a move that has rocked the industry. The reason given by Galaxy Digital was the “failure to deliver” BitGo’s financials according to a previously signed agreement.

Thailand’s Siam Commercial Bank (SCB) has also pulled out of its proposed 51% takeover of Bitkub due to the barrage of regulatory actions facing the digital asset exchange as Thai regulators ramp up the against operators in the sector.

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