According to an email statement sent around on Tuesday, Kraken, one of the world’s longest-standing cryptocurrency exchanges, will cease serving Japanese residents in the coming months.
The San Francisco-based cryptocurrency exchange, which launched services in the region in 2014 and currently ranks in the top ten crypto exchanges by trading volume, explains that rising costs associated with operating in Japan are responsible for the shut down. Kraken points out that the suspension of services only applies to residents of Japan, and not Japanese citizens or businesses located outside of Japan.
Kraken believes that by suspending services in Japan, they will be able to focus their resources to improve in other “geographical locations.” They say that they came to the decision after “careful consideration of revenue against costs and resources required to maintain service.”
The shut down will come in phases, with last deposits being allowed through mid-May sometime, the last day of trading around mid-June, and final withdrawals expected around the end of June of this year.
Japanese residents waiting for Mt. Gox distributions will still be able to withdraw their funds through Kraken as a “one-time payment,” so long as the bankruptcy court overseeing the Mt. Gox case approves.
Kraken remains optimistic about Japan, and says it “will consider the possibility of resuming service for Japan residents” after they have a “chance to better catch up to” their rapid growth.
While Kraken clearly cites costs associated with doing business in Japan as the reason for stopping service to Japanese residents, many speculate that there is more at play. Kraken had previously been allowed to operate in Japan without a license, however, in recent months, Japan’s Financial Services Agency has been cracking down on cryptocurrency exchanges after a $500 million hack of Coincheck. Since the hack, the FSA has been issuing warnings to various crypto exchanges, suspending others, while many more have chosen to withdraw their license applications and shut down. Kraken may be following a similar path in the face of stricter regulations from the FSA.