Kraken To Shut Operations in Japan by Citing 'Weak Crypto Market'

The cryptocurrency exchange, Kraken announced its decision to withdraw operations in Japan on Wednesday, citing current market conditions. Its local subsidiary Payward Asia will deregister from the Financial Services Agency by 31 January 2023.

Kraken Exits Japan as Crypto Market Wanes

"As a result of considering the current situation surrounding the Japanese market and the sluggish global cryptocurrency market, we came to the conclusion that it would be difficult for Kraken to invest the necessary resources to further grow its business in Japan," an official blog post of Kraken stated (translated from Japanese).

The crypto exchange will suspend deposits for its Japanese clients from 9 January and urged them to withdraw funds by 31 January. They can either transfer the crypto holdings to a third-party wallet or convert them to Japanese yen for withdrawing them to a bank account. It also assured having the necessary funds to handle the withdrawal requests of all of its Japanese clients in a timely manner.

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The Second Exit of Kraken from Japan

It is the second time the company is pulling out of the Japanese market. Initially, it launched services in the country through the same subsidiary Payward Asia in 2014, until it terminated operations in 2018 to better focus its resources in "other geographical areas."

Payward Asia relaunched the service again in 2020 for Japanese residents from its Tokyo-based headquarters, offering spot crypto exchange services.

"The decision to suspend operations in Japan will not have a material impact on Kraken's overall business," Kraken added.

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Kraken is one of the oldest cryptocurrency exchanges. Its long-running CEO, Jesse Powell, who founded the exchange, stepped down from the apex post earlier this year, handing the charges to Dave Ripley.

The impact of ongoing crypto market conditions also affected Kraken, as the exchange recently reduced 30 percent of its workforce.

Meanwhile, Kraken settled with the US Treasury Department last month, paying a penalty of $362,159. The exchange was blamed for violating the US sanctions rules by offering services to the residents of Iran. Furthermore, it agreed to invest an extra $100,000 for implementing additional sanctions compliance controls.