Rakuten tries to improve the image of ill-fated Everybody’s Bitcoin by changing its name to Rakuten Wallet.
Rakuten Inc (TYO:4755) has earlier today announced that the registration process of Rakuten Wallet, formerly known as Everybody’s Bitcoin, as a virtual currency exchange is complete.
Rakuten first announced its plans to acquire Everybody’s Bitcoin in August 2018.
Commenting on the deal’s rationale, Rakuten said it expects that the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future. In order to provide cryptocurrency payment methods smoothly, the company believes it is necessary to provide a cryptocurrency exchange function. Furthermore, a number of customers, in particular foreign exchange customers, of Rakuten Securities, the securities company of the Rakuten Group, have been calling for the provision of a cryptocurrency exchange service, which is also part of the background of the Rakuten Group considering entry into the cryptocurrency exchange industry.
The deal was announced about four months after the Japanese authorities issued a business improvement order against Everybody’s Bitcoin Inc. The administrative sanctions were imposed following on an on-site inspection conducted by the Japanese Financial Services Agency (FSA). The check concerned the risk management system of the company. The inspection had detected a series of non-compliance issues, including problems with keeping statutory books, insufficient provision of information to clients, AML issues, lack of control over system risks, as well as problems with internal audits.
In its announcement today, Rakuten said that, in response to the business improvement order, Rakuten Wallet has officially restructured its management system, including formulating a business improvement plan and strengthening its business management and internal control systems.
The company changed its trade name from “Everybody’s Bitcoin Co., Ltd.” to “Rakuten Wallet Co., Ltd.” on March 1, 2019. It will stop the current service at the end of March, whereas the new service is set to commence in April.
The impact of the registration of Rakuten Wallet Co. as a virtual currency exchange company on the consolidated business results for the fiscal year ending December 2019 is seen as immaterial.