Popular cryptocurrency exchange Kraken has made the decision to halt its business in Japan, according to a Bloomberg report. The rising costs associated with operating as a crypto firm in Japan were given as the reason to exit the country, although Kraken did say that it may return to the country in the future.
In a statement, Kraken explained that “suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas.” The statement continued to say that Japanese citizens based outside of the country will not be affected by the suspension.
The cryptocurrency markets don’t seem to have been heavily affected by the announcement. At press time, Kraken was ranked as the 11th-largest exchange worldwide in terms of trading volume ($173 million over the last 24 hours); Bitcoin was trading for $8019 (down 0.2% in the last 24 hours.)
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Rising Costs for Crypto Firms in Japan as Regulations Tighten
Japan has been tightening its regulatory grip on cryptocurrency exchanges operating within the country ever since the $530 million Coincheck hack earlier this year.
While no new regulations have been passed, the Japanese government has begun enforcing existing laws with more vigilance. Japanese authorities have begun conducting in-person inspections of cryptocurrency exchanges; exchanges who are applying for licensure under the Virtual Currency Act are under heavy scrutiny.
In fact, several cryptocurrency exchanges have made the decision to close down operations rather than spend the time and money to become sufficiently compliant with regulatory standards.
Many voices in the crypto community believe that Japan’s regulations are some of the world’s finest, striking a balance between enabling innovation and keeping fraudsters out of the market.
Recently, Ripple’s head of regulations called on the UK’s government to build a regulatory system similar to Japan’s. He stated that the industry is “at that time now where we need more clarity and rules and we need more certainty.”