Kraken, one of the largest cryptocurrency exchanges in operation, has just announced that it will be ceasing its operations in Japan for the time being.
The move is as a result of increased regulations and sky-high operational costs in the Japanese cryptocurrency market.
In a report Bloomberg published, Kraken stated:
“Suspending our services for Japan residents will allow us to better focus on our resources to improve in other geographical areas.” They reassured their numerous customers by adding: “This is a localised suspension of service that only affects residents of Japan and does not impact services for Japanese citizens or businesses domiciled outside of Japan”.
For a while now, Japan has been cited as the hub for crypto activity by the cryptocurrency community. A large number of Japanese organizations have been hopping on the cryptocurrency bandwagon. Internet companies have shown growing interest in dipping into the rising market. As an example, Yahoo Japan recently announced the acquisition of a cryptocurrency exchange.
Along with companies, it seems the general public has warmed up to the sector as well. R25 conducted a survey where it was reported that approximately 14% of Japanese males within the age bracket of 25 to 30 own cryptocurrency.
Even while the Japanese public’s acceptance of cryptocurrency is on the rise, increasing government regulations have cropped up after the $560 Million hack of Coincheck. Several calls have been made by investors and members of the public for increased scrutiny of the exchanges to prevent a future occurrence.
The Japanese Financial Services Agency made a move towards protecting the industry by requiring licenses for exchanges and a higher level of security. This led to a lot of closures as some exchanges couldn’t meet these demands.
Kraken, on the other hand, obtained the necessary authority to operate in Japan without a license but the American-based company was never a crowd’s favorite.
Over the course of its 3-year existence in Japan, Kraken was never able to reach the volume it required to justify its existence in Japan. As of April 17th, the BTC/JPY pair accounted for a measly 0.9% of the exchange’s total volume, minuscule when compared to the BTC/USD pair’s total volume.