Crypto Exchange Kraken Shuts Down Operations In Japan• January 1, 2023 7:46 pm • Comments
As the extended crypto bear market continues, it looks like one of the most popular crypto exchanges has been affected as well.
The crypto exchange Kraken has just announced that it will shut down its operations in Japan as a result of the market uncertainty that exists globally.
This is not any surprising news for most investors as Kraken is now just one of many crypto firms that have been impacted, but at least Kraken has not gone bankrupt yet.
It is unknown at this point if the company has any plans to ever re-enter the Japanese crypto market ever again in the future.
Whether or not this announcement will have any impact on the broader economic environment is still to be determined considering Kraken is one of the world’s largest crypto exchanges.
To provide some data, Kraken had around $408 million of trading volume per day which represents a significant portion of the market.
Kraken is closing its cryptocurrency exchange services in Japan as the company restructures to navigate the fallout from this year’s meltdown in digital assets https://t.co/ltliCGVhoY
— Bloomberg Crypto (@crypto) December 29, 2022
Along with numerous other major industry players, it has been deep in cost-cutting mode lately. On Nov. 30, the firm slashed 1,100 jobs, or 30% of its workforce, a move it said was needed to “adapt to current market conditions.”
Crypto has been plagued by all manner of scandals this year, which has been termed the industry’s “annus horribilis.”
The pain started with the demise of Terra, a once $60 billion stablecoin operator, and was followed by the toppling of several other dominos with exposure to the project, including the crypto lender Celsius and hedge fund Three Arrows Capital.
Crypto exchange FTX’s slide into bankruptcy is the most notable industry failure so far. Its controversial co-founder and former CEO Sam Bankman-Fried has been released on bail while awaiting trial for fraud and other criminal charges.
Although many firms have gone bankrupt in the past year or are reducing the scope of their operations, many investors are still optimistic about the long term.
After all, this is not the first crypto winter that the industry has been through and many are also comparing it to the dot com bubble that happened in the early 2000s.
During that time, a lot of companies had also ceased to exist, but those that survived eventually become extremely valuable tech companies.
Similarly, the comparison can also be made to crypto projects that are still surviving and even prospering during this time.
As of now, major exchanges like Coinbase and Binance are still operating although they may have reduced the number of employees in their workforce.
It is still recommended for investors to store assets off the exchange and in a personal wallet after buying crypto from the exchange.
Kraken will shut its operation in Japan by end of January 2023.😲
Kraken announced that it will layoff roughly 1000 people from its global workforce due to the challenging market conditions. ❌
— RK Gupta (EarnWithRK) (@earnwithrk) December 28, 2022
The decision was prompted by “current market conditions in Japan in combination with a weak crypto market globally,” the company said in a blog post on Wednesday.
Kraken users in the country have until the end of next month to withdraw their fiat and crypto holdings, with the option of transferring crypto to another wallet or wiring Japanese yen to a local bank.
Jesse Powell, a co-founder of the exchange, departed from his role as CEO in September. He was to be replaced by Chief Operating Officer Dave Ripley. The company cut 30% of its global workforce two months later as the crypto market continued to stagnate following the collapse of rival exchange FTX.
Kraken will now prioritize resources and investments to ensure the long-term stability of the exchange, the blog post said.
Not a good start for 2023.
U.S.-based crypto exchange Kraken said on Wednesday it would cease its operations in Japan next month, citing the current market conditions in the country and a weak crypto market globally.
— Yassin Mobarak (@Dizer_YM) December 28, 2022
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