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Canada’s cryptocurrency exchange Coinsquare and blockchain investment bank DLTA 21 Blockchain have teamed up to establish a centralized digital currency exchange in Japan amid tightened scrutiny by the local authorities, the companies said on Tuesday.

The new cryptocurrency marketplace, to operate under the DLTA 21X brand, will seek regulatory approval from the Japanese watchdog – a measure whose outcome is worth following in light of the ongoing investigations of crypto exchanges in Japan.

In the recent years, the country has grown to become a haven for the blockchain and digital currency business with booming trading volumes and surging market participants.

“In addition to fast-growing interest in Japan to develop world-class decentralized applications on the blockchain (dApps), Japan reportedly accounts for the majority of global Bitcoin trading,” Matthew Hornor, executive chairman of DLTA 21 commented in a press release. He underlined that, currently, there are 3.5 million crypto traders in the Asian country.

The spike in crypto popularity, however, has come at a cost and Japan has seen a number of digital scams, including the notorious attack on local crypto exchange Coincheck. A total $530 million disappeared from Coincheck in January, which is the largest theft in the sector so far. This became yet another incentive for Japan’s Financial Services Agency (FSA) to tighten exchange regulations.

Coinsquare and DLTA 21 appear to have accepted the regulatory challenge. Cole Diamond, Coinsquare CEO, maintained that Japan is a “unique market” and the Canadian exchange seeks to offer its trading technology there. Vancouver-based DLTA 21 will, on its part, provide its expertise in trading, compliance and blockchain technology.

If it gets a green light from FSA, the new crypto trading platform will initially operate in Japan. However, Coinsquare and DLTA 21 have plans to further expand into other Asian countries.