Kraken announced plans to shut operations in Japan again, citing a weak global crypto market as well as market conditions in the East Asian country.
In a statement, the San Francisco-based crypto exchange said it will deregister from the Financial Services Agency on January 31, 2023. Kraken explained,
“Current market conditions in Japan in combination with a weak crypto market globally mean the resources needed to further grow our business in Japan aren’t justified at this time. As a result, Kraken will no longer service clients in Japan through Payward Asia.”
For the uninitiated, Kraken operated in Japan under its subsidiary – Payward Asia – in Tokyo. The company first launched services in 2014 to Japanese residents but ceased offering trading four years later.
In September 2020, Payward Asia’s registration as a crypto asset exchange service provider with the Financial Services Agency was approved. It kicked off deposits and withdrawals in Japanese Yen and trading services in October of the same year.
The platform even began spot trading for five crypto-assets, including Bitcoin, Ethereum, XRP, Bitcoin Cash, and Litecoin, keeping Tokyo as its base. Amid a renewed interest in crypto assets in 2021, Payward planned to provide Japanese traders and institutional investors with new investment opportunities.
As Kraken wraps up its second iteration, the company notified its users that the deposit functionality will be removed from their accounts on January 9th. Trading functionality will continue to enable users to convert their balance to the asset of their choice.
Meanwhile, any remaining funds will be transferred to a Guaranty Account at the Legal Affairs Bureau in accordance with legal requirements. Users will have to coordinate with the Legal Affairs Bureau on how to retrieve their JPY balance if they fail to take any action before the deadline.
FTX’s downfall sent shockwaves through the industry. The unraveling not only exacerbated the crypto winter but also set the stage for a long-term decline. With Bitcoin losing almost two-thirds of its value since the start of the year, several companies have been either forced to shut down operations, freeze hiring, or lay off existing employees.
Kraken became another entity to join the list of crypto exchanges that have had to turn to extreme layoffs due to the current bear market. Last month, it announced plans to lay off 1,100 employees, or nearly one-third of the total workforce, in a bid to weather the crypto winter.