Kraken, one of the world’s largest and oldest cryptocurrency exchanges, is pulling out of Japan. The US-based exchange has announced that they are suspending operations citing the growing costs of their Japanese business.
Headquartered in San Francisco, the exchange expects to exit the Japanese market in June but did not rule out returning to the country at some point in the future. In the report published by Bloomberg, the company in an emailed statement said:
“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.”
With the BTC/JPY pair accounting at the time of writing for only 0.11% of the exchange’s overall 24hr trading volume, it is likely that the platform’s relatively low popularity in the Japanese market contributed to their decision to reallocate their resources elsewhere.
Kraken had only a 0.01% share of the global BTC/JPY trading volume, according to data from CryptoCompare. The dominant exchange in Japan is bitFlyerFX which controls an 84.69% market share of the BTC/JPY market.
Japan is generally viewed as a friendly climate for crypto and cryptoexchanges – with corporate ventures such as Yahoo Japan’s recent investment in BitARG Exchange and a positive regulatory approach encouraging investors in the space.
Kraken’s announcement however comes amid a surge of regulation following the theft of $530 million of NEM from the CoinCheck Exchange in January. Japan’s financial regulator, the Japanese Financial Services Agency, is tightening licensing requirements for exchanges – closing down two exchanges in March after they failed to meet their data security standards.
While the Japanese market remains one of the warmest to cryptocurrency and Blockchain, Western exchanges looking to gain a foothold in Japan will take note.