Kraken, a cryptocurrency exchange based in the United States, has announced that it will leave the Japanese market. Kraken is the latest company to reduce its footprint following a disastrous year for digital assets.
In a statement released on Wednesday, Kraken said that effective January 31, 2023, it would no longer be registered with the Financial Services Agency in the East Asian country.
Kraken has announced it is “fully funded to ensure all affected clients can withdraw their assets in a timely manner,” so users can withdraw their fiat and cryptocurrency holdings on the exchange without any problems.
“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,” Kraken said.
“We value the trust our clients put in us, and we will do what we can to minimise the impact of our decision for you. That’s why we are committed to ensure a seamless transition, and we hope the information in this email will help you decide what is the best option for you.”
In a sector-wide reckoning after the spectacular fall from the grace of FTX and its creator Sam Bankman-Fried, Kraken has announced that it will lay off 1,100 people, or about one-third of the whole staff.
Shockwaves were felt throughout the business after FTX declared bankruptcy. Bankman-Fried was subsequently arrested on several fraud charges, leading to calls for stricter regulation and predictions of the sector’s long-term demise.
Bitcoin, the largest cryptocurrency, has seen its value drop by about two-thirds since the beginning of 2022.
Under its company Payward Asia, Kraken temporarily suspended operations in Japan in 2018, citing the country’s high operating costs, but has since relaunched with an office in the country’s capital of Tokyo.