Celebrating 10 years since our founding, and the first of the next 10 years to come
Happy New Year! We are grateful for the extraordinary support we have received throughout the previous year from our customers, crypto asset enthusiasts, government officials, industry associations, and our shareholders. As we begin a new year, I would like to extend my sincerest New Year's greetings to you all.
2024 marks a special year for us at bitFlyer Group. Despite the challenging industry environment known as the "crypto winter," we believe that spring has arrived to put an end to this prolonged difficult period, mainly thanks to improvements in the business environment, including tax reforms and favorable market trends.
Last year, I returned as the CEO of bitFlyer Holdings to lead a reorganization of the company and prepare for the upcoming spring. This year, as we celebrate our 10th anniversary, we are taking the company to a new level under a brand new structure.
Looking back on the past 10 years, it has been a period of creating a market for crypto assets in Japan and popularizing blockchain technology. In the next 10 years, I am confident that crypto assets will become an integral part of people's lives and asset building, and blockchain technology will become an indispensable part of our social infrastructure. This year, the first of the next 10 years, we at bitFlyer Group are set to make aggressive and significant leaps forward.
Reflecting on 2023
Since my return as representative of the bitFlyer Group in March last year, we have faced and one by one resolved each of the many challenges left by the previous management team. We have also strengthened cooperation with our overseas offices, bitFlyer USA, Inc. and bitFlyer EUROPE S.A., to rebuild a sense of unity as a global company. Our strength lies in the fact that we have had "zero hacking incidents since our founding" and it was a year focused on maintaining our high level of security and building a framework that allows us to enhance it further.
The business environment has also improved significantly over the past year. As the Representative Director of the Japan Blockchain Association (JBA), I have been involved in crypto asset tax reform and was able to influence and move forward with some especially challenging tax reforms for two years in a row. One significant change was in the taxation of the year-end valuation of crypto assets held by corporations. In addition to the exemption of crypto assets issued in-house, the recent tax reform outline decided by the Cabinet in December also extends the exemptions to crypto assets held by third parties under certain conditions, such as continuous holding. These reforms will dramatically improve the environment for crypto asset financing and help attract more foreign investment. We see this as an opportunity to expand the use of our blockchain technology, "Miyabi," and facilitate a business environment that allows even more companies to raise funds by issuing tokens.
Furthermore, market trends have shifted. For instance, the price of bitcoin, which was around 2.1 million yen at the beginning of 2023, surpassed 6 million yen by the end of the year. While there are various factors at play, this rise is partly attributed to the speculation that a spot bitcoin ETF (Exchange Traded Fund) may soon be approved by U.S. authorities. If such ETF become tradable on stock exchanges, it could lead to market expansion by attracting investors who are new to crypto assets. Looking at the market, the long winter is coming to an end and spring will soon be upon us.
Outlook and Aspirations for 2024
Following incidents such as the hacking of Japanese exchanges in 2018, Japan has enacted extremely strict regulations. However, these regulations have helped to protect customer assets. For example, during the collapse of leading U.S. exchange FTX in November 2022, the assets of FTX Japan customers were protected thanks to these strict regulations. Learning from the bitter experiences of the past, the rules has clarified one by one and exchanges like us invested heavily to comply with them. As a result, what were "the world's strictest rules" have become "the world's most advanced rules." For instance, the business environment is becoming more conducive for working with stablecoins, IEOs, and NFTs. Japan is poised to regain its position as a global center in the world of crypto assets. Under these circumstances, we at bitFlyer are determined to make it a satisfactory year for our customers.
Our mission at bitFlyer Group is to "Simplify the World with Blockchain. " In order to realize our mission, we aim to solve social issues with technology and make life more convenient for people around the world.
We will continue to uphold our principle of "One Team, One Dream" and make a new 10-year path with the goal of becoming "Asia's No.1 web3 company."
We look forward to your continued support of the bitFlyer Group over the coming year.
Yuzo Kano
CEO, bitFlyer Holdings