Kraken, a global crypto currency exchange, has again decided to remove its operations from Japan. The company cites a strain on its resources as the primary reason for this decision, along with a "weak crypto market."
Kraken announced (1) its decision to discontinue its activities in Japan and deregister from Financial Services Agency by January 31, 2023, in a blog post published on December 28. The company explained that this decision was made as part of its attempts to "prioritize resources" and investments, stating:
"The current market conditions in Japan, in combination with a weak crypto market globally, mean that the resources required to grow our business in Japan further are not justified at this time," said the CEO of a cryptocurrency company.
As a direct consequence, Kraken will discontinue providing service to customers in Japan via Payward Asia, the statement continued.
The company's affiliate, Payward Asia Inc, manages the Japanese-facing portion of Kraken's exchange.
Failure of Kraken to Get its Foothold in Japan
It was a subsidiary firm that operated in Japan from 2014 until April 2018. It decided to stop doing business there to concentrate its available resources more effectively on expanding into "other geographical areas."
The subsidiary decided to re-launch in October 2020, establishing its headquarters in Tokyo and initiating spot trading on five main assets, with future expansion plans in mind.
The second iteration of this process has now been completed. Kraken has committed to ensuring that all affected customers can remove their cash from the exchange no later than January 31, 2023, at the very latest.
Users can move their crypto currency holdings to an external wallet, convert their assets to Japanese yen, and then move the funds to a bank account in their home country.
In January, withdrawal limits will be lifted, and a procedure enabling users to retrieve their staked Ether (ETH) will also be implemented; this information will be made public soon.
"In accordance with guidance from the JFSA, all affected Kraken clients have until January 31, 2023 to award their fiat and crypto holdings from Kraken’s platform. You may choose to either withdraw your crypto holdings to an external wallet or liquidate your portfolio and withdraw your JPY to a domestic bank account."
On January 9, trading functions will remain available, but deposits will be disabled.
In recent weeks, it would appear that Kraken's primary focus has been on reducing expenses.
In response to challenging market conditions, Kraken said on November 30 that it had made one of its "hardest decisions" by reducing its global staff by around 1,100 employees, comparable to 30 percent of its total human resources.
The crypto currency exchange Kraken stated that decreased trading volumes and fewer client sign-ups contributed to the move to reduce expenses. Moreover, the exchange also stated that the intervention was essential "to sustain the business for the long-term."
In the version of the most recent announcement published in Japanese, Kraken included a statement stating that the company's departure from the Japanese market will not significantly affect Kraken's overall operations.