Zodia Custody and SBI Holdings End Japan Joint Venture Amid Strategic Realignment

Zodia Custody and SBI Holdings End Japan Joint Venture Amid Strategic Realignment

Zodia Custody, a digital asset custody provider supported by Standard Chartered, has formally ended its joint venture with Japan’s SBI Holdings, two years after the partnership began. The entity, SBI Zodia Custody, was majority-owned by SBI (51%) with Zodia Custody holding 49%, and intended to deliver institutional-grade custody solutions within the Japanese digital asset market.

Strategic Divergence Behind Dissolution

Julian Sawyer, CEO of Zodia Custody, told Bloomberg that the decision to dissolve the partnership was mutual, driven by differing strategic priorities between the two companies. Though the venture had engaged in preparatory discussions with Japan’s Financial Services Agency (FSA) regarding local registration, no formal application was submitted prior to the dissolution.

“This is a strategic alignment between SBI and ourselves as a mutual decision that we have other priorities and they have other priorities,” Sawyer commented, highlighting that the decision preceded any regulatory filing.

SBI Holdings Frames Exit as Strategic Move

Kosuke Kitamura, spokesperson for SBI Holdings, emphasized that exiting the joint venture should not be interpreted as a retreat from the Japanese market. Instead, the dissolution is positioned as a proactive decision to accelerate synergies across SBI’s broader digital ecosystem.

Recently, SBI Holdings was rumored to be preparing Japan’s first dual-asset cryptocurrency exchange-traded fund (ETF) involving Bitcoin and XRP exposure, though the company later denied these reports.

Zodia Custody Shifts Focus to Favorable Jurisdictions

Meanwhile, Zodia Custody continues to expand its global footprint, exemplified by its acquisition of Tungsten Custody Solutions in the UAE. This move signals a strategic pivot toward jurisdictions with more accommodating regulatory frameworks.

Japan’s Regulatory Environment Remains Challenging

Japan’s stringent and cautious regulatory approach remains a significant barrier for foreign cryptocurrency firms. Maksym Sakharov, CEO of decentralized onchain bank WeFi, recently told Cointelegraph that regulatory bottlenecks, rather than tax policy, are the primary factor driving crypto innovation away from Japan.

Despite proposals to lower the crypto gains tax to 20%, Sakharov noted that Japan’s slow and risk-averse approval culture, along with the FSA/JVCEA pre-approval process and lack of a dynamic regulatory sandbox, continue to hinder startups and liquidity from flourishing domestically.

“The 55% progressive tax is painful and very visible, but it’s not the core blocker anymore,” he said. “The FSA/JVCEA pre-approval model and the absence of a truly dynamic sandbox are what keep builders and liquidity offshore.”