Major Crypto Exchange Kraken to Shut Its Operations in Japan
The US trading platform cites rising costs in the Asian country
Kraken, one of the leading cryptocurrency exchanges, plans to cease its Japanese services, Bloomberg reported on Tuesday. The US-based trading platform cited rising costs as a major reason for leaving one of the world’s biggest crypto markets.
“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,” the company explains as quoted by Bloomberg.
Japan was the first foreign target for the San Francisco-based crypto exchange. The company chose the third largest global economy as Kraken founder and CEO, Jesse Powell, was advising Mt. Gox, a former Japanese Bitcoin exchange, the world’s biggest, after one of the hack attacks that finally brought it down.
Jesse Powell is famous in the crypto world for his rapid expansion strategy of Kraken by acquisitions of several competitors - US crypto exchange Coinsetter, Canadian Cavirtex and Dutch Clevercoin, as well as wallet funding service Glidera and market visualization platform Cryprowatch.
Powell created Kraken in the summer of 2011 after just having helped Mt. Gox respond to a hack, with the idea that “exchange is the most critical part of the Bitcoin ecosystem”. Kraken began real trading from September 2014 in the US and from October in Japan, a few months after Mt. Gox collapsed. Kraken enables selling and buying of major cryptocurrencies like BTC, ETH or LTC for five fiat currencies (USD, EUR, GBP, JPY and CAD), as well as inter-virtual currency trading.
On Tuesday, Kraken was number 12 with a USD 168 billion 24-hour trading volume.
Crypto exchanges in Japan
Kraken is the latest major crypto exchange that changes its Japanese strategy. The Asian country has become a global hub for crypto trading after China and South Korea tightened grip on digital currencies. In 2017, Japan became the world’s first country to regulate crypto exchanges, obliging them to register and get an operating license from its Financial Services Agency (FSA). Following the USD 530 million Coincheck hack in January, it initiated inspections of crypto exchanges and ordered seven of them to make security improvements.
Last month, Binance, the largest virtual currency exchange, announced plans for a Maltese office after FSA warned it for operating in the country without a proper registration and license.
Last week, Tokyo-based OKEx crypto exchange, number 4 on Tuesday by trading volume, decided also to open an office in the EU member state as “a foundation for further OKEx growth” because of the Maltese government’s friendly cryptocurrency and blockchain strategies.