Kraken, the US-based cryptocurrency exchange, has announced their plans of ceasing all of their trading operations in Japan in the near future.
RELEASE THE KRAKEN . . . FROM JAPAN!
The Kraken exchange, one of the larger cryptocurrency exchanges in existence, has just announced that they will be leaving the Japanese market for the time being.
In a report published by Bloomberg, Kraken stated:
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.
This announcement came about due to cited increased operational costs, and Japan’s increasing regulation of the cryptocurrency market may have also been a factor.
A HUB FOR CRYPTO ACTIVITY
Cryptocurrency community members often cite Japan as one of the main cryptocurrency capitals in the world, with many organizations in Japan hopping on the cryptocurrency bandwagon. Yahoo Japan has just announced their partial acquisition of a cryptocurrency exchange as they plan to dip their feet into this rising market.
Along with organizations, it seems that the public has gotten quite involved in the sector. A survey conducted by R25 has found that approximately 14% of Japanese males, ranging from the ages of 25 to 30, own cryptocurrencies.
Contrary to this positive news, increasing government regulations have surged after the immense $560 Million USD hack of Coincheck, a Japan-based exchange. Following the hack, there were calls for increased scrutiny to make sure that such a hack would not occur again.
For that reason, the Japanese Financial Services Agency has been moving towards more protective stances which will require exchanges to be licensed and feature high levels of security. Some exchanges have been unable to meet these demands and have closed down.
LEAVING THE LAND OF THE RISING SUN
Kraken had obtained the required authority from regulators to operate without a license in the country. However, the American-based exchange never really caught on with the Japanese public.
Over the course of their 3-year history in Japan, they failed to garner an adequate amount of volume on the exchange. As of April 17th, the volume between the BTC/JPY pairs was only $165,298 in the past 24 hours, which is a measly 0.9% of the exchange’s total volume.
When you take a look at the BTC/USD volume, at $36 million, you can clearly see some discrepancies between the two figures. This discrepancy is even higher when compared to localized exchanges, such as bitFyler, which has done $130 million in BTC/JPY pairs over the last 24 hours.
Considering the levels of adoption Kraken has seen, along with expected costs for increased regulation, it makes sense why Kraken is focusing their eyes on other markets. The exchange expects to end their presence in Japan by the end of June. However, the company is leaving the door open to returning to Japan one day.