Kraken, the largest Bitcoin exchange in euro volume and liquidity, is set to end its activities in Japan due to rising costs.
The San Francisco-based company said it may re-enter Japan, a key market for cryptocurrencies, in future, Bloomberg reported citing an emailed statement.
Founded in 2011, Kraken began its operation in Japan in October 2014 with the launch of Bitcoin-yen trading.
The exchange plans to tentatively cease all its services by the end of June, Bloomberg reported. Based on 24-hour trading volume, Kraken is ranked 10th on CoinMarketCap.
Suspension of the Japanese business will allow the company to better channel its resources to improve in other locations, Kraken said. The move will not affect services to Japanese citizens or businesses domiciled outside the country.
The news of Kraken’s exit comes after Binance, the world’s largest cryptocurrency exchange by 24-hour trading volume, announced plans to open business in Malta as it fell out of favor with the Japanese financial regulator for failing to get a license to operate in the country.
Japanese regulators are closely watching crypto exchanges after the massive hack of the unregistered Coincheck exchange in January. Kraken is also not registered.
The Financial Services Agency increased scrutiny and asked all exchanges to register with it. The country has 16 registered exchanges and roughly the same number were waiting approval.
However, the recently strengthened norms made some exchanges withdraw their request for registration. About a 100 firms are reportedly interested in entering the Japanese crypto market.
Early April, a Japanese government-backed research group had proposed guidelines for legalizing the initial coin offerings, or ICOs, the crypto-world equivalent of the initial public offering of shares of a company.
These are a controversial means of raising money in the crypto-world. South Korea and China have banned ICOs due to concerns over scams and excessive speculation.
by Jyotsna V