Digital currency exchange Kraken will close down its operations in Japan next month, in another sign of consolidation in the battered crypto industry.
In a blogpost on Wednesday, Kraken said it would cease crypto trading services through its Japanese subsidiary, Payward Asia, and deregister from Japan’s Financial Services Agency on Jan. 31, 2023.
It is the second time Kraken has left the Japanese market. The first was in 2018, when it closed four years after initially establishing operations in 2014. It relaunched in the country in 2020 after securing registration from the regulator.
Kraken said the move was “part of Kraken’s efforts to prioritize resources and investments in those areas that align with our strategy and will best position Kraken for long term success.”
It cited a combination of “current market conditions in Japan” and a “weak crypto market globally” as the reasons behind its decision.
Japanese customers will have until Jan. 31 to withdraw their fiat and crypto holdings from the Kraken platform, the company said. They’ll have the option to either withdraw their crypto to an external wallet or cash out and transfer Japanese yen to a domestic bank account.
From Jan. 9, users in Japan will no longer be able to deposit funds into their account, though trading functionality will remain in place so that they can convert their balance to the asset of their choice.
Kraken is one of the world’s largest crypto exchanges, processing $408.9 million of trading volumes per day, according to CoinMarketCap data.
Along with numerous other major industry players, it has been deep in cost-cutting mode lately. On Nov. 30, the firm slashed 1,100 jobs, or 30% of its workforce, a move it said was needed to “adapt to current market conditions.”
Crypto has been plagued by all manner of scandals this year, which has been termed the industry’s “annus horribilis.”
The pain started with the demise of Terra, a once $60 billion stablecoin operator, and was followed by the toppling of several other dominos with exposure to the project, including the crypto lender Celsius and hedge fund Three Arrows Capital.
Crypto exchange FTX’s slide into bankruptcy is the most notable industry failure so far. Its controversial co-founder and former CEO Sam Bankman-Fried has been released on bail while awaiting trial for fraud and other criminal charges.
Prices of bitcoin and other digital currencies have slid as investors soured on the market and as climbing interest rates have put downward pressure on speculative assets such as tech stocks. Bitcoin, the world’s biggest token, is down over 60% so far this year.