Coinbase is considering the possibility of withdrawing from the Japanese market as part of its response to the sharp decline in cryptocurrency trading following the collapse of FTX.
Is Coinbase crypto exchange pulling out of Japan?
The United States-based cryptocurrency exchange started doing business in Japan in 2021 in collaboration with Mitsubishi UFJ Financial Group. In 2016, the second company invested more than 1 billion yen ($7.74 million) in Coinbase.
According to a report published by Nikkei Asia on Jan. 13, Coinbase is considering a number of alternatives, particularly regarding the company’s operation in Japan, including the possibility of selling the firm or giving up its registration license.
In its third wave of layoffs since last summer, cryptocurrency exchange Coinbase said on January 10 that it will cut its worldwide workforce by approximately 950 employees, or 20%, by the end of June.
Coinbase affected by FTX fallout
According to CoinMarketCap, the worldwide market capitalization of cryptocurrencies saw a drop of about 20% when FTX filed for protection from creditors in November. Coinbase is reevaluating its business in Japan in light of the possibility that regulatory costs may increase.
According to comments made by Coinbase CEO Brian Armstrong in a blog post published on Jan. 10, the cryptocurrency market has “seemed a fallout from unscrupulous actors in the industry and there may still be more contagion.”
Earlier, in June 2022, the firm announced plans to lay off 1,100 workers. Subsequently, in November 2022, the company laid off dozens of employees, including key executives.
Meanwhile, at the end of this month, the Payward group, which is based in the United States and operates the Kraken cryptocurrency exchange, will cease operations in Japan. Payward is asking customers who may have been affected to move their residual crypto assets to digital wallets hosted by third-party services and reinvest any yen they may have into their personal bank accounts.
If Coinbase deregisters, the company is expected to behave similarly.