Japanese cryptocurrency exchange bitFlyer announced today it’s expanding to the U.S, with approval to operate in 41 states starting today. This includes regulatory approval in New York via the state’s Department of Financial Services’ “BitLicense”, which only five other cryptocurrency companies currently have.
For comparison, Coinbase has approval to operate in 38 states (including Washington, D.C) and Gemini is operating in 46 states (including Washington, D.C).
The exchange is by far the biggest in Japan, trading about $180M worth of bitcoin per day. In terms of traditional exchange volume this ranks as the 14th largest exchange worldwide, but when you add margin volume to the calculation the exchange is actually the largest in the world in terms of total exchange volume.
Founded in 2014, bitFlyer has raised a total of $36M in venture funding.
At launch bitFlyer’s U.S exchange will only support bitcoin/USD pairs, but “plans to expand its cryptocurrencies to include altcoins such as Litecoin, Ethereum, Ethereum Classic, Bitcoin Cash and more”.
Right now the exchange only supports deposit and withdraw via bitcoin and USD wire transfer, which means early users will likely be institutional or high net worth investors. Eventually the exchange wants to add additional forms of fund inflow and outflow like ACH transfer, making it easier for the average consumer to deposit or withdraw cash.
Like most exchanges bitFlyer will have tiered verification levels. The first level asks for personal information like your name and address and email and cell phone verification, and in return you can deposit and withdraw up to $2,000 in bitcoin per day and trade up to $3,000 in bitcoin per day. The second tier asks for additional information like bank account verification and proof of identity via photo ID, and allows users to deposit and withdraw up to $50,000 in bitcoin per day and trade an unlimited amount of the cryptocurrency.
With Bitcoin spiking 1,200% over the past year, there’s a ton of demand to trade the cryptocurrency and not a lot of places to do it. While there are dozens of established exchanges around the world only a few operate legally in the United States, with the two main ones being Gemini and Coinbase. And even these exchanges get flack for slow customer service response times, an almost unavoidable byproduct of the insane spike in customers they are seeing.
If bitFlyer can provide a solid trading and customer service experience, there’s a lot of room for them to establish themselves in the U.S market.