Zodia Custody has ended its Japan joint venture with SBI Holdings just two years after launch, citing shifting priorities and regulatory complexity.
Key Takeaways
- Zodia Custody and SBI Holdings have mutually agreed to dissolve their Japan joint venture, SBI Zodia Custody, which launched in 2023.
- Japan’s stringent crypto regulations played a role, as the venture had not yet submitted a formal registration application to the Financial Services Agency (FSA).
- Zodia is refocusing on markets with friendlier regulations, recently acquiring Tungsten Custody Solutions in the UAE.
- SBI says the move is part of a broader strategy shift, not a withdrawal from the crypto space.
What Happened?
Zodia Custody, a digital asset custodian backed by Standard Chartered, and Japanese financial giant SBI Holdings have terminated their joint venture in Japan. The decision, described as mutual and strategic, reflects both firms’ changing global priorities and the regulatory challenges of operating in Japan.
Standard Chartered-backed digital assets storage firm Zodia Custody has dissolved its Japanese joint venture with SBI two years after it was launched https://t.co/fGnJbCb79r
— Bloomberg (@business) September 11, 2025
Zodia and SBI Exit Japan Joint Venture
Zodia Custody and SBI Holdings announced the end of their joint venture, SBI Zodia Custody, which was 51 percent owned by SBI and 49 percent by Zodia. The venture was launched in 2023 to provide institutional-grade digital asset custody in Japan.
Julian Sawyer, CEO of Zodia Custody, confirmed the decision, telling Bloomberg, “This is a strategic alignment between SBI and ourselves as a mutual decision that we have other priorities and they have other priorities.” He noted that while the company had been in talks with Japan’s Financial Services Agency (FSA), no formal registration application was ever submitted.
“We were working and preparing for an application,” Sawyer said, clarifying that the exit came before any official filing.
Regulatory Roadblocks in Japan
Japan, while once a leader in crypto regulation, has become a tough environment for foreign firms. The country’s cautious regulatory stance aims to protect consumers but often stifles innovation.
Maksym Sakharov, CEO of decentralized bank WeFi, previously told Cointelegraph that Japan’s real problem isn’t taxes, but “slow, prescriptive, and risk‑averse” approval processes. He pointed to the FSA’s strict pre-approval model and lack of a dynamic regulatory sandbox as major obstacles for builders and capital alike.
These challenges are underscored by past scandals that have shaped Japan’s crypto regulatory landscape. In 2024, DMM Bitcoin suffered a major hack exceeding 300 million US dollars. A decade earlier, the infamous Mt. Gox hack in Tokyo devastated investor confidence and led to heightened oversight.
SBI and Zodia Pursue Separate Paths
Despite the closure, both companies insist the decision is not a retreat. Kosuke Kitamura, an SBI spokesperson, told Bloomberg, “This dissolution does not represent a retreat. It is a proactive decision aimed at pursuing group-wide synergies with greater speed under our digital ecosystem.”
For Zodia Custody, the shift signals a broader strategic redirection. “We have a finite amount of resources available globally,” Sawyer said, highlighting the firm’s recent acquisition of Tungsten Custody Solutions in the United Arab Emirates. This move suggests Zodia is targeting jurisdictions with more favorable regulatory climates.
Meanwhile, SBI Holdings continues to explore its ambitions in digital finance. Although recent reports claimed SBI was launching Japan’s first dual-asset ETF covering Bitcoin and XRP, the company later denied those reports.
CoinLaw’s Takeaway
Honestly, this move does not surprise me. Japan is known for its meticulous regulation, and while that’s good for consumer protection, it can choke innovation. In my experience covering crypto markets, I’ve seen companies thrive in places that offer regulatory clarity without excessive friction. Zodia’s pivot to the UAE speaks volumes. It’s a sign that firms want to scale in regions that welcome digital asset innovation instead of wrapping it in red tape. I see this as a smart play for Zodia, even if it’s a missed opportunity for Japan.
