SBI Holdings, the investment arm of Japanese financial giant SBI Group, has canceled a business partnership with Chinese cryptocurrency startup Huobi Group.
Yet, in the latest announcement, SBI Holdings said it has scrapped its original plan to use Huobi's technology, know-how and human resources in operating the exchanges, and instead has decided to bring the efforts in-house.
In explaining the reasons for canceling the deal, SBI Holdings said the firm needs a system that incorporates higher levels of security and which can respond promptly to domestic and overseas regulations.
As such, according to the statement, SBI Holdings will now utilize SBI Group's own resources to build a system with enhanced security and sufficient processing capacity.
The decision comes at a time when the FSA is beefing up its efforts in scrutinizing Japanese exchanges regarding security measures, following the hack of some $530 million-worth of the NEM cryptocurrency from the Coincheck exchange in January.
Just last week, the FSA issued administrative penalties to several domestic platforms deemed reckless by the agency, having allegedly provided insufficient security measures to fully protect investors.
At press time, Huobi Group had not responded to CoinDesk's inquiries for comments on its plan to further pursue the Huobi Japan effort.
Editor's note: Some of the statements have been translated from Japanese.
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