Kraken, the US-based cryptocurrency exchange, has announced the shuttering of its trading operations in Japan due to soaring operating costs. However, the company has hinted that it could return in the future. Although Japan has surfaced as a hotbed for cryptocurrency trading in recent months, Kraken’s dominance in the Japanese crypto market is fairly small.
Closing Up Shop in Japan
The San Francisco-based crypto exchange Kraken will call it quits from Japan’s fertile trading ground by the end of June 2018. Reportedly, the company will terminate all services it’s currently offering to Japanese residents.
As quoted on Bloomberg, Kraken stated:
“Suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas. This is a localized suspension of service that only affects residents of Japan and does not impact services for Japanese citizens or businesses domiciled outside of Japan. ”
Japan’s favorable crypto regulations have led to the development of a snowballing industry in recent weeks. The island country has long been known as a crypto-friendly country. However, after the recent Coincheck heist of $500 million USD worth of digital assets, regulators in the country have been strict, especially in issuing licenses to new exchanges.
Regulators Pressure Crypto Exchanges
Following the Coincheck heist, the Financial Services Agency (FSA) — Japan’s top financial watchdog — have disciplined several exchanges for not actualizing proper security measures. Although Kraken has given growing costs as the primary reason for its exit from the Japanese crypto trading turf, the FSA’s pressure surely must have played some role, however big or small.
Instead of working hard to comply with regulatory standards, some cryptocurrency exchanges in the country have chosen the easy way out — exiting the market. As such, Japanese exchanges like Tokyo Gateway and Mr. Exchange have suspended their operations in Japan as of late, too. Other would-be exchanges have withdrawn from applying for a license.
At press time, Kraken was the 10th largest crypto exchange per 24-hour volume as ranked by CoinMarketCap.com.
Will Japanese regulators ease or increase their regulatory standards? Share your views in the comments section.
Images via LEX MACHINÆ, PCMag