San Francisco-based cryptocurrency exchange Kraken is re-launching its trading services for Japanese residents, nearly two years after it exited the lucrative market when regulators stepped up oversight in the country.
Japanese subsidiary of Kraken, Payward Asia, was awarded a license to trade as a crypto-asset exchange operator under the Payment Services Act. In addition, the firm has seemingly secured its membership of the Japan Virtual Currency Exchange Association (JVCEA), the self-regulatory organization that has the mandate to oversee the industry.
Kraken was among the few platforms permitted to offer crypto services without a license in Japan while it sought to meet the rules that established bitcoin as a legitimate payment method. However, the exchange withdrew its services in 2018 due to rising costs of maintaining its business there, but indicated at the time it could return in the future.
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Why Kraken Exited the Japanese Market
The move occurred after Tokyo regulators became more cautious and tightened its grip in the wake of a cryptocurrency heist that saw nearly $540 million worth of customer crypto assets lost at Coincheck.
Payward Asia’s initial product lineup will be limited to spot trades (both crypto-crypto and JPY-crypto) for five major assets: Bitcoin (XBT), Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH) and Litecoin (LTC). However, the exchange promises that more features will be available soon, though there is no release date just yet. Hence, we will have to wait as the product evolves in the coming months.
The service launch is now planned around the middle of September, Kraken said. The exchange also provided further details including that Japanese residents will need to open an account with Payward Asia to start using services in Japan. Current customers will need to take the same action as there will be no account transfer function.
Japan stands out in Asia when it comes to the regulatory aspect, especially after several jurisdictions, such as China and India made it nearly impossible for crypto firms to exist. As a result, Kraken’s expansion further confirms that Japan will continue to quest to become a global cryptocurrency hub.