The largest and most successful cryptocurrency exchange, Kraken, has announced that it has laid out a plan to exit Japan. What this means is that Japanese crypto investors or traders will not be able to use the company’s services in their country.
The reasons why the company has decided to end its operations in the country are still scanty but according to an article posted on Bloomberg, the San Francisco Company has indicated the high cost of operating in the country as one of the primary reasons why the management team has decided to make this decision.
Kraken team has also said that they would consider doing business in Japan at a later date when the environment is conducive for doing business.
The intention to close shop came up during a meeting that was held in October 2014 but the current high cost of running the cryptocurrency exchange in the country has put the company in a difficult situation.
According to a statement released to the press by the company, the management team is of the idea that making their services unavailable to residents of Japan will give the company a better way of running their business, better focus on the resources that they have as well as improve their services in other parts of the world. The statement also went ahead to clarify that the suspension of services was local and was meant to affect only crypto investors in Japan. In addition, Japanese citizens living outside the country who are active cryptocurrency traders or are planning to purchase any of the listed digital currencies are free to do so on Kraken platform.
As noted in a research done 24 hours ago by Coin Market Cap, Kraken is number 10 globally based on the volume they recorded per day. It is estimated that more than $190 million worth of trading is done through the company on a daily basis.
A quick arithmetic shows that billions worth of cryptocurrency trading is done by the company on a monthly basis thereby making it one of the most formidable forces in the industry.
Japan Financial Services Agency has over the last few months conducted multiple inspection runs to bolster security and ensure that all the company operations are accurate. You should also note that Japan has experienced a number of challenges related to the digital currencies from investor fraud hack that resulted in loss of more than $500 million to fake coins.
Japan government has also being supportive of crypto currencies or assets, as most people prefer to call them. They have however shown interest in regulating the new exchanges and currencies moving forward instead of banning them. One of the recent decisions that took most people aback is the move to legalizing initial coin offerings! This kind of fundraising technique is illegal in some parts of the world such as South Korea and China.