Cryptocurrency exchange giant Kraken is closing operations in Japan, citing increasing costs as the decisive factor behind the move.
Kraken is shutting down “all of its services” in Japan by June, leaving only a matter of weeks before the company ceases to operate within the Japanese market, Bloomberg reported. The decision has been attributed to rising commercial costs, and in particular the rising costs of compliance for cryptocurrency businesses.
However, Kraken left open the possibility of a return at a future date, should conditions become more favourable.
In a statement, Kraken said the decision will allow them to improve services in other markets, and will not preclude non-domiciled Japanese people or companies from accessing their services:
“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.”
The news comes as the latest blow to the Japanese cryptocurrency sector, following increasing regulatory efforts. The Financial Services Agency (FSA) has been increasing its level of scrutiny over exchange businesses operating within Japan, in addition to the current licensing scheme.
Following the recent high-profile NEM token theft from Coincheck in January, and concerns from SBI Virtual Currencies over cyber security that saw them postponing the launch of their new venture in Japan, authorities are continuing to increase their scrutiny of cryptocurrency exchanges in the country.
Yet despite recent setbacks, Japan remains one of the most cryptocurrency-friendly in the region, and the wider world. Even this month, new regulations have been proposed which would legalise initial coin offerings, as well as providing a new regulatory regime for ICOs there.
As one of the world’s biggest cryptocurrency exchanges, Kraken’s withdrawal from Japan will be a significant loss, specifically to SegWit-Core BTC (also referred to as Bitcoin legacy or Core) and Ethereum community there.
The news comes a matter of days after Yahoo Japan announced its intention to take a 40% stake in cryptocurrency exchange BitARG.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.