Compliance and Operations in Japan
Coinbase has announced that it will cease operations in Japan due to the current market conditions. The company stated in a blog post All Coinbase Japan customers will have until February 16, 2023 to withdraw their holdings. Furthermore, the platform will not accept deposits from January 20, 2023.
All remaining cryptocurrencies held on Coinbase after February 17th will be converted into Japanese Yen. In the following month, all remaining Japanese yen will be sent to an escrow account at the Legal Affairs Office in accordance with legal requirements.
Coinbase has announced that it will be making job cuts to comply with these regulations. Further announcing that they have segregated the Japanese yen and cryptocurrency assets of their clients into custody. The exchange stated that it is committed to ensuring that all clients are able to withdraw their assets as soon as possible.
Customers can withdraw their cryptocurrency holdings to any other virtual asset service provider, Coinbase Wallet, or self-hosted wallet. Alternatively, customers can choose to liquidate their wallet and withdraw Japanese Yen to a local bank account. However, Coinbase’s recent decisions don’t seem isolated.
Market volatility and job cuts.
Coinbase’s exit from the Japanese market is said to be due to the current volatile Japanese market conditions. However, it should be noted that rival exchange Kraken recently announced that it would cease operations in Japan.
Developments in the market have led many stock exchanges to reassess their operations in the region. Against the grain, Binance announced that it would be hiring after returning to the Japanese market due to local regulations easing crypto firms.
As a result of 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 FTX crash played a major role in necessitating these cost-cutting measures.
Impact on the crypto industry and future prospects
It should be noted that the current market conditions have been harsh on the entire cryptocurrency industry. The problems of the crypto sector continued this year, marked by sediment sinksMultiple layoffs legal obstacles. Rising interest rates and fears of an economic downturn have put pressure on the cryptocurrency industry Investors flee risky assets. The news of Coinbase ceasing operations in Japan after a year and a half is another symptom of the market situation and its impact on the cryptocurrency industry.
Coinbase is the second largest crypto exchange in the world and hopes to reach “appropriate operating efficiency”. It aims to better handle the cryptocurrency winter by reducing global operating costs and complying with Japan’s regional regulations.