Cryptocurrency exchange Kraken is suspending all of its services to Japanese residents. The exchange has been allowed to operate in Japan while its application with the country’s financial regulator is being reviewed.
Kraken Pulling Out of Japan
Kraken announced on Tuesday the suspension of its services to Japanese residents. “The exact dates for suspending trading and funding have not yet been determined,” the exchange wrote, adding that tentatively the last day for deposits is “around mid-May,” the last day for trading is “around mid-June,” and the last day for withdrawals is “around end-June.” Kraken elaborated:
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. Clients residing outside Japan who have access to our Japan banking partners will continue to have access and will still be able to trade our JPY markets.
The exchange detailed, “The decision involved careful consideration of revenue against the costs and resources required to maintain service,” noting that “suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas.”
Residents of Japan waiting on Mtgox distributions “will still be able to withdraw the funds through their Kraken account as a one-time payment, provided that this is approved by the court,” Kraken confirmed.
Rising Costs of Doing Business in Japan
Kraken has been serving Japanese residents since October 2014. It has applied for a license with the Japanese Financial Services Agency (FSA) but has not been approved. The exchange has been allowed to operate while its application is still pending as a “deemed dealer.”
However, since the hack of Coincheck, the agency has been scrutinizing all crypto exchanges and has launched on-site inspections of all deemed dealers. Initially, there were 16 deemed dealers in Japan but a growing number of them have been withdrawing their applications, citing high costs.
Kraken is the seventh crypto exchange to withdraw its application with the FSA. Others are Tokyo Gateway, Mr. Exchange, Raimu, Bitexpress, Bit Station, and Campfire.
We deeply regret suspending this long-standing relationship and hope to resume services for Japan residents in the future…at the present time, it is impractical to continue service for Japan residents…After we have had a chance to better catch up to our rapid growth, we will consider the possibility of resuming service for Japan residents.
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Images courtesy of Shutterstock, Nikkei, and Kraken.
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