Kraken, one of the oldest cryptocurrency exchanges in the world, is closing shop in Japan, citing rising cost of operations.
1 hr ago
San Francisco-based cryptocurrency exchange Kraken is retreating from Japan and will stop providing services to local residents by the end of this year’s first half.
One of the oldest digital currency operators in the world said the rising cost of doing business in Japan had made its operations less profitable. However, Kraken added it might reconsider moving back to Tokyo in the future. The company officially commenced operations in Japan in October 2014.
“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,” a company statement said.
Kraken is the 10th biggest digital trading company by volume, Bloomberg said, citing data from CoinMarketCap. The operator accounts for more than 6.3% of global Bitcoin transactions.
Japan is a traditional haven for cryptocurrency traders as its business climate is friendly to the digital currencies space. However, the $530 million Coincheck heist, the largest cryptocurrency hacking incident in history, has forced regulators to impose stricter rules and require of digital asset operators to obtain a license with the Financial Services Agency (FSA).
In March, the FSA penalized seven cryptocurrency operators and even demanded the closure of two exchanges for their failure to comply with new rules, including the introduction of an anti-money laundering mechanism and employment of fully-trained staff to protect customers against theft and other fraudulent activities.
The FSA ordered the suspension of Bit Station and FSHO for at least one month and instructed the companies to improve their security plans. The five penalized crypto exchanges are Coincheck, Mr. Exchange, GMO Coine, Tech Bureau, and Bicrements.
Japan wants common crypto rules
Also last month, Japan urged leaders of G20 countries to adopt common regulation of digital assets to cover money laundering.
The Japanese official made the call at the G20 summit in Buenos Aires and suggested that the topic be included in the agenda. The official stated then:
“Discussions will focus on anti-money laundering steps and consumer protection, rather than how cryptocurrency trading could affect the banking system. The general feeling among the G20 members is that applying too stringent regulations won’t be good.”
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