Due to high market losses and trading slumps, famous crypto exchange Coinbase is mulling to stop operations in Japan.
Customers will have until Feb. 16 to withdraw their fiat and crypto holdings, Coinbase said in a blog post Wednesday. Any remaining crypto held at Coinbase on or after Feb. 17 will be converted to yen, and the company will send any remaining cash to a guaranty account at the Legal Affairs Bureau in the month after that date, it said. “Due to market conditions, our company has made the difficult decision to halt operations in Japan,” according to the post. Coinbase plans to conduct a “complete review of our business in the country,” it said.
The business closure follows the firm’s decision to cut 20% of its workforce globally, the latest layoffs at the San Francisco-headquartered firm as it grapples with a slump in crypto assets. Coinbase is retreating from Japan even as the nation loosens some crypto rules, which has enticed rival Binance — the largest digital-asset exchange — to recently buy a local player to re-enter the country.
The cryptocurrency market is going through turbulent times as the plunging value of digital assets amid rising interest rates and the collapse of some of its biggest players, including FTX, have shaken the faith of investors in what was seen as the next big thing in the world of finance.
Coinbase, Crypto.com and Huobi have all announced plans to lay off about 20 per cent of their respective staff, while a source told Reuters earlier this month that Genesis, too, had cut jobs, equating to 30 per cent of its workforce.
All Coinbase Japan customers will have until Feb. 16 to withdraw their fiat and crypto holdings, the company said in a blog post. The company’s shares shed about 86 per cent of their value last year, amid a brutal selloff in cryptocurrencies ranging from bitcoin to dogecoin that wiped out more than a trillion dollars from the sector. Coinbase’s decision to exit comes only a few weeks after rival exchange Kraken said it, too, would cease its operations in Japan this month.
Several firms have suffered from waning investor appetite for crypto after major exchange FTX blew up in September. Higher interest rates and worries of an economic downturn have also piled pressure on the crypto industry, as investors flee risky assets. The crypto sector’s woes have continued this year, marked by plunging deposits, layoffs and multiple legal hurdles.
Coinbase, Crypto.com and Huobi have all announced plans to lay off about 20% of their respective staff, while a source told Reuters earlier this month that Genesis, too, had cut jobs, equating to 30% of its workforce.
We’ve decided to wind down the majority of our operations in Japan, which led to eliminating most of the roles in our Japan entity,” Nana Murugesan, vice president for international and business development, said in an interview last week. Coinbase previously teamed up with Mitsubishi UFJ Financial Group to launch a crypto exchange in Japan in 2021.
Coinbase pledged to make the transition in Japan “as smooth as possible,” the blog post said. The company has segregated the yen and crypto assets of its customers in custody in compliance with Japan’s regulation, and is committed to ensuring that all its clients can withdraw their assets “at their earliest convenience,” it said.