Global cryptocurrency exchange Kraken has decided to pull its operations in Japan for the second time, citing a strain on its resources amid a “weak crypto market.”
In a Dec. 28 blog post, Kraken said it has decided to cease its operations in Japan and deregister from the Financial Services Agency by Jan. 31, 2023, which it said was part of efforts to “prioritize resources” and investments, stating:
“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,” it added.
Kraken’s Japanese-facing exchange is operated by its subsidiary Payward Asia Inc.
The same subsidiary company operated in Japan from 2014 to 2018, before pulling out in April 2018 so that it could better focus its resources on growth in “other geographical areas.”
In October 2020, the subsidiary decided to relaunch with a headquarters in Tokyo, offering spot trading on five major assets with plans to expand. The second iteration has now come to an end, with Kraken committing to allowing all affected clients to withdraw their funds from the exchange by Jan. 31, at the latest.
Users can withdraw crypto holdings to an external wallet, or convert their portfolio to Japanese yen and then transfer it to a domestic bank account. Withdrawal limits will be removed in January and there will also be a process to allow users to retrieve their staked Ether, which will be shared shortly.
Deposits will be disabled on Jan. 9, though trading functions will remain.
Kraken appears to have been focusing on cutting costs in recent months.
On Nov. 30, Kraken announced it had made one of its “hardest decisions” to cut its global workforce by approximately 1,100 people, equivalent to 30% of its headcount, amid difficult market conditions.
The exchange said lower trading volumes and fewer client sign-ups contributed to Kraken’s decision to cut down on expenses and that the changes were necessary “to sustain the business for the long-term.”
In the Japanese language version of the most recent announcement, Kraken added that its exit from the Japanese market will not have a material impact on Kraken’s overall business.