SBI in talks to buy stake in Japan’s Bitbank

SBI Holdings submitted a letter of intent on Friday and has begun due diligence to acquire shares in Bitbank, with the aim of making the cryptocurrency exchange a consolidated subsidiary of the financial group. The company has opened talks with Bitbank on a capital and business alliance, and said timing and deal structure will be determined after due diligence and internal approvals.

SBI Chairman and President Yoshitaka Kitao announced the filing in a statement. He added that the firm plans to acquire Bitbank shares after completing due diligence and following necessary internal procedures. “The company has submitted a letter of intent regarding the acquisition of shares and has begun discussions with Bitbank regarding a capital and business alliance,” Kitao said.

Bitbank, founded in May 2014, operates one of Japan's larger domestic cryptocurrency exchanges. The exchange highlights its security record and reports it has not experienced a hacking incident since its launch. Bitbank recently introduced a crypto-linked credit card that lets users pay bills using bitcoin and other assets held on the exchange and provides 0.5% cashback paid in crypto on monthly spending.

SBI has been consolidating its crypto activity under its in-house exchange unit, SBI VC Trade. Last month the group merged Bitpoint Japan into that unit as part of efforts to streamline operations and improve profitability. Acquiring Bitbank would concentrate more retail and institutional crypto services under SBI VC Trade.

Japanese authorities are moving to bring crypto assets under the Financial Instruments and Exchange Act, a change that alters regulatory requirements for exchanges and crypto products. SBI said taking Bitbank into the group would strengthen its position in Japan's crypto market as firms adapt to the revised rules.

SBI did not disclose the size of the stake it intends to buy, Bitbank's valuation, or a timetable for completing any transaction. The company said discussions on timing and the final structure of a deal will continue after due diligence and internal approvals are complete.