- Coinbase’s decision to halt operations in Japan comes after rival exchanges also announced their departures from the region.
- The exchange recommends that customers in Japan transfer their funds to other exchanges, Coinbase (NASDAQ:COIN) Wallet, or a self-custody wallet.
- Coinbase has stated that it is committed to making the transition as smooth as possible for its customers.
Compliance and Operations in Japan
Coinbase has announced that it will be halting its operations in Japan due to the current market conditions. The company stated in a blog post that all Coinbase Japan customers will have until February 16, 2023, to withdraw their holdings. Furthermore, the platform will no longer accept deposits from January 20, 2023.
All remaining crypto held on Coinbase after February 17th will be converted to JPY. The following month, all remaining JPY will be sent to a Guaranty Account at the Legal Affairs Bureau per legal requirements.
Coinbase has announced that it would be carrying out job cuts to comply with these regulations. Further declaring that they have separated the Japanese Yen and crypto assets of its customers in custody. The exchange has stated that they are committed to ensuring that all customers can withdraw their assets at their earliest convenience.
Customers can withdraw their crypto holdings to any other virtual asset service provider, Coinbase Wallet, or self-hosted wallet. Alternatively, customers can choose to liquidate their portfolio and withdraw their JPY to a domestic bank account. However, Coinbase’s recent decisions do not seem isolated.
Market Volatility and Job Cuts.
Coinbase’s exit from the Japanese market is reportedly due to Japan’s current volatile market conditions. However, it should be noted that rival exchange Kraken also recently announced that it would cease operations in Japan.
Developments in the market have caused several exchanges to re-evaluate their operations in the region. Going against the grain, Binance had announced they would be hiring following a return to the Japanese market due to local regulations for cryptocurrency companies easing.
As a result of the recent market conditions, major exchanges Kraken, Huobi, and Crypto.com have all announced plans to lay off 30%, 20%, and 20% of their workforce, respectively. The fallout from the collapse of the FTX crypto exchange has played a major role in necessitating these cost-cutting measures.
Impact on the Crypto Industry and Future Outlook
It is worth noting that the current market conditions have been harsh for the entire crypto industry. The crypto sector’s woes have continued this year, marked by plunging deposits, layoffs, and multiple legal hurdles. Higher interest rates and worries of an economic downturn have pressured the crypto industry as investors flee risky assets. The news of Coinbase halting operations in Japan after one and a half years is another symptom of the market condition and its impact on the crypto industry.
On the Flipside
- The crypto industry is still in its early stages, and the recent market conditions are a natural part of its growth and evolution.
- The crypto industry is becoming more mature and regulated, expected to attract more institutional investors and lead to steady growth in the long term.
- Coinbase’s decision to halt operations in Japan is being viewed as a strategic move to allow for focus on more profitable markets.
Why You Should Care
Coinbase is the second-largest crypto exchange in the world and hopes to reach an “appropriate operational efficiency.” It aims to better cope with the crypto winter by reducing global operating costs and complying with Japan’s regional regulations.
Find out more about recent developments around Coinbase Japan:
Coinbase to Shut Down Most of Its Operations in Japan, COIN Shoots Up
Read about Binance’s return to the region:
Binance Seeks Permit To Re-enter Japan Four Years After Regulatory Struggle