Kraken Exchange Pulls Out Of Japan Due To High Costs
Kraken, a San Francisco-based cryptocurrency exchange, has announced today that it would no longer be operating in Japan due to the high costs of operation in the Eastern country. The Japanese market is one of the biggest markets for trading in the world and the company stated that there is a chance that it might be returning there in the future, but has not stated any dates.
Also, Kraken has stated that only Japanese residents will be affected by this decision, not the Japanese clients that are customers operating outside of their homeland. Kraken is the 10th largest cryptocurrency in the world by trading volume, so this will surely affect the market.
The reasons for Kraken to leave Japan
The company released a statement (Japanese only) in which it explains that by suspending services in Japan, the company will be able to focus on other areas and improve their services in other countries. If the company is able to organize itself better and “catch up” to their rapid growth, Kraken bosses intend to go back and offer services to the Japanese again.
Cryptocurrency and legislation in Japan
The Japanese law recognizes Bitcoin as a legal asset since last year in the country, which means that it is legal to buy Bitcoin there. In fact, Bitcoin is responsible for almost 60% of all the current trading volume in Japan.
After recognizing the Bitcoin, the Japanese government has decided that all the exchanges in the country have to register if they want to operate there. Regulators have become more cautious after a recent cryptocurrency heist involving Coincheck in January, in which more than $500 million in digital tokens were stolen from Coincheck.
Last month, Binance, which is the biggest exchange in the world, was warned by the Japanese financial agency that it could not operate in the country without a proper license.
Speculations are that Kraken has left Japan for these reasons, as it would be less profitable to grow and profit by being compliant with the regulations from the Japanese governmental agencies.