In a blog post, the company cited a combination of current market conditions in Japan and a weak global crypto market as the reason for the decision. According to the announcement, Kraken will deregister from the Financial Services Agency and no longer service clients in Japan through its subsidiary, Payward Asia. The subsidiary operated in Japan from 2014 to 2018 before withdrawing its services to focus on growth in other areas. It was relaunched in Tokyo in October 2020 but has now ended. Kraken will allow all affected clients to withdraw their funds from the exchange by the end of January, either by transferring them to a domestic bank account or moving them to an external wallet.
Kraken Cuts Workforce amid Difficult Market Conditions
In November 2021, Kraken cut its global workforce by approximately 1,100 people or 30% of its headcount. The cryptocurrency exchange cited lower trading volumes and fewer client sign-ups as contributing factors to the need to cut expenses and sustain the business for the long term. This news comes shortly after the announcement that Kraken will be exiting the Japanese market for the second time, citing a combination of weak market conditions in Japan and a weak global crypto market.
Kraken's Exit from the Japanese Market Will Not Have a Material Impact on Overall Business
Despite the decision to exit the Japanese market, Kraken has stated that the move will not have a material impact on the company's overall business. In the Japanese language version of the announcement, the exchange reassured its clients that it would continue to operate in other regions and remain a leading player in the global cryptocurrency industry. Kraken has a strong presence in the United States and Europe and consistently ranks among the top exchanges by volume.
In the coming weeks, Kraken will be working to facilitate the withdrawal of funds for affected Japanese clients and assist them in transferring their holdings to external wallets or domestic bank accounts. Trading functions will remain available until the end of January, while deposits will be disabled on January 9th. The company has also indicated that a process will be in place to allow users to retrieve their staked Ether.
While the decision to exit the Japanese market may be disappointing for some, it is common for cryptocurrency exchanges to reevaluate their operations and focus on regions where they can best allocate their resources. Companies need to be strategic in their growth and make tough decisions to stay competitive and sustainable in the current market environment. Kraken's decision to prioritize its resources and investments in other areas reflects this mindset.