Coinbase Stops Operations in Japan Due to Market Volatility

Coinbase
Global Inc, one of the biggest and publicly-listed (<a href=”https://www.financemagnates.com/tag/coinbase/” target=”_blank” rel=”follow”>NASDAQ:COIN</a>) cryptocurrency
exchanges, announced on Wednesday it is halting its Japanese operations due to
the severe market slump and heightened volatility observed during previous
months.Harsh Conditions
Force Coinbase to Make Tough DecisionsAccording
to Coinbase’s blog post, all customers from Japan must withdraw their crypto
and fiat holdings before 16 February 2023. Any <a href=”https://www.financemagnates.com/terms/c/cryptocurrencies/” class=”terms__main-term” id=”b091101e-6e02-4b36-aa0e-7c972dfdd6ed” target=”_blank”>cryptocurrencies</a> that remain in
accounts after that date will be converted to Japanese yen and sent to the
Guaranty Account at the Legal Affairs Bureau under local regulations. Users
will then have to apply for recovery of their funds at the Bureau.”Due
to market conditions, our company has made the difficult decision to halt
operations in Japan and to conduct a complete review of our business in the country.
However, we are committed to making this transition as smooth as possible for
our valued customers,” Coinbase wrote in a blog post published on
Wednesday.The
exchange assures that it has segregated its customers’ assets in
cryptocurrencies and Japanese yen and that everyone can withdraw them without
any major delays. Coinbase recommends funds be transferred to another exchange, Coinbase
Wallet or a self-custody wallet. The platform will stop accepting deposits as
of 20 January 2023.In response
to the news, Coinbase’s shares on the Nasdaq exchange fell by 2.75% to $52.65
per share in pre-market trading hours. However, these are still at the highest
levels in more than a month.Watch this recent FMLS22 executive interview with Lory Kehoe, the Director of EMEA Business Development at Coinbase.Coinbase Cuts
JobsLast week
media outlets informed that Coinbase was going to close most of its operations
in the Japanese market, following a plan for global job cuts. Earlier this year, the <a href=”https://www.financemagnates.com/terms/e/exchange/” class=”terms__secondary-term” id=”b5da6e64-2afe-421d-9b81-16404b7d59d6″ target=”_blank”>exchange</a>
announced its plan to cut its workforce by 20%, or 950
people, as part of a second round of layoffs.”We’ve
decided to wind down the majority of our operations in Japan, which led to
eliminating most of the roles in our Japan entity,” Nana
Murugesan, a Coinbase executive, said during an interview last week.The current
suspension of operations in Japan seems to confirm her words. Although Coinbase
has not made it clear that it intends to leave the country entirely, only to
conduct a comprehensive review of its business, analysts have speculated about
its plans to move out. Coinbase’s
job cuts and suspension of operations in Japan come at a time when rival exchange <a href=”https://www.financemagnates.com/cryptocurrency/binance-hires-when-coinbase-cuts-employment-amidst-crypto-winter/” target=”_blank” rel=”follow”>Binance
is announcing a renewed hiring spree</a> and deciding to return to the Japanese
market as local regulations for cryptocurrency companies loosen.Crypto
Exchanges Feel the Digital Assets BluesHowever, Coinbase’s
recent decisions do not seem to be isolated. In November, another major
cryptocurrency exchange <a href=”https://www.financemagnates.com/cryptocurrency/crypto-exchange-kraken-cuts-global-workforce-by-30/” target=”_blank” rel=”follow”>Kraken announced</a> that it would lay off up to 30% of its
employees. Earlier this year, <a href=”https://www.financemagnates.com/cryptocurrency/crypto-downzing-continues-as-huobi-plans-to-prune-workforce-by-20/” target=”_blank” rel=”follow”>Huobi made a similar announcement</a>, looking to reduce
its workforce by 20%.Furthermore, last week,
Crypto.com announced a potential headcount reduction, willing to cut its
workforce by 20%. The “significant damage” to the industry after the
collapse of the FTX crypto exchange explains the decision.