Coinbase is closing Japan operations amid crypto headwinds
Nasdaq-listed crypto exchange operator Coinbase is closing its operations in Japan as part of a move to cut costs amid a slump in the digital-asset sector.
Coinbase is scaling back in Japan as the San Francisco-headquartered firm plans to lay off 20% of its workforce globally, or roughly 950 workers. The exchange said the move was necessary to weather the industry downturn, adding that other subsidiaries with lower profitability will be shut down as well.
CEO Brian Armstrong said the decision would reduce Coinbase’s operating expenses by 25% between the fourth quarter 2022 and first quarter 2023 earnings results.
“Due to market conditions, our company has made the difficult decision to halt operations in Japan and to conduct a complete review of our business in the country. All Coinbase Japan customers will have until February 16th, 2023 JST to withdraw their fiat and crypto holdings from Coinbase,” Coinbase said.
Coinbase is finalizing its discussions with Japan’s Financial Services Agency (FSA) to ensure the safety and security of customer assets. The exchange teamed up with Mitsubishi UFJ Financial Group, which invested over 1 billion yen into Coinbase six years ago, in 2021 to launch a crypto exchange in Japan.
Rival exchange Kraken will also close down its operations in Japan in another sign of consolidation in the battered crypto industry following the collapse of FTX.
Kraken has decided to deregister from the Financial Services Agency (JFSA) as of January 31, 2023. Explaining the rationale behind its second exit, the company cited current market conditions in Japan in combination with a weak crypto market globally. As such, the resources needed to further grow their business in the country aren’t justified at this time.
Coinbase and Kraken are scaling back in Japan even as Binance acquired Japanese-registered crypto exchange service provider Sakura Exchange BitCoin (SEBC). SEBC is among a total of thirty one crypto exchanges registered in the country with the Financial Services Agency (FSA).
Binance pulled out of Japan in 2018 after the country’s financial regulator warned that the crypto giant is operating in Japan without permission. At the time, CEO Changpeng Zhao spoke out against rumors that Binance was subject to criminal charges by the FSA. He also claimed that the exchange was in “constructive dialogues” with the regulator over the matter.