Kraken Ceases Operations in Japan
Kraken is the latest exchange based in Japan to close shop. In a statement, the US-based cryptocurrency exchange cited the high cost of doing business in the country as the reason for the move. The company, however, says it may consider returning in the future.
“Suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas,” the statement said.
The suspension only affects Japanese residents.
“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,” the statement continued.
The move comes amid heightened regulatory scrutiny in Japan, one of the biggest cryptocurrency hubs in the world.
Two other exchanges voluntarily wound up in March after being issued improvement orders by the Financial Services Agency (FSA).
Binance, the fifth largest exchange in the world by market capitalisation was recently ordered to stop operations. The exchange was yet to obtain a license to operate in the country.
Exchanges are required to implement strict controls to prevent cyber attacks and money laundering. The FSA regularly conducts physical inspections to ensure compliance.
A massive hacking of Coincheck in January that resulted in the loss of $534 million worth of tokens prompted authorities to act tough on exchanges. This was the biggest heist in history and it was the second time the exchange was hit in less than a year.
In 2014, Mt Gox, then controlling 70% of all Bitcoin transactions was hacked resulting in the loss of 850,000 worth $450,000 at the time. The company declared bankruptcy soon thereafter. 200,000 bitcoins have since been recovered.
At least two exchanges were suspended for one month in March for failing to meet standards. Kraken ranks eleventh with a 24-hour volume of $172,420,685 according to data from CoinMarketCap. Like Binance, Kraken did not have an operating license.
Despite the crackdowns, Japan remains a relatively cryptocurrency friendly jurisdictions worldwide.