Zodia Custody, backed by Standard Chartered, and local financial powerhouse SBI Holdings have quietly ended their two-year partnership that set out to deliver institutional-grade crypto storage.

The project never made it past the planning stage. Although the partners engaged with the Financial Services Agency, no application for a license was filed before both sides decided to walk away. Zodia chief Julian Sawyer framed the decision as mutual, saying the companies had simply chosen different priorities.

Different Directions

For SBI, the exit does not mean retreat. The group insists it is doubling down on its broader digital ecosystem strategy and has been exploring new financial products, including crypto ETFs, though not all reported initiatives have come to fruition.

Zodia, on the other hand, is turning its attention abroad. Recent expansion in the United Arab Emirates — capped by the acquisition of Tungsten Custody Solutions — reflects a strategy of targeting markets with friendlier rules than Japan’s.

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A Tough Market to Crack

The collapse of SBI Zodia Custody underscores why Japan remains difficult terrain for foreign crypto ventures. Executives in the sector say that while the country’s high taxes once scared off companies, it is now the rigid approval process and slow-moving bureaucracy that keep startups and liquidity out. Without a more flexible sandbox or faster licensing, critics argue, Japan risks being left behind as other jurisdictions compete for crypto innovation.

The SBI–Zodia breakup may have been amicable, but it highlights a larger truth: global firms eager to scale crypto infrastructure are finding Japan to be one of the hardest markets to enter.

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