Cryptocurrency exchange Coinbase is exiting Japan due to market conditions. The move comes days after the company announced its third round of layoffs in less than a year amid the ongoing bear market.
In a Wednesday blog post, the exchange said it has made the “difficult decision” to halt operations in Japan and conduct a complete review of its business in the country due to market conditions.
Just weeks ago, rival exchange Kraken made a similar announcement, saying that it will close down its operations in Japan citing a combination of “current market conditions in Japan” and a “weak crypto market globally” as the reasons behind its decision.
Coinbase said it is working to make the “transition as smooth as possible.” The exchange detailed that fiat deposit functionality will be removed on January 20th and customers will have until February 16th to withdraw all their fiat and crypto holdings.
In an interview with BNN Bloomberg, Coinbase executive Nana Murugesan said last week that the exchange’s Japanese subsidiary is closing the bulk of its operations. “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,” Murugesan said at the time.
The extreme measures by Coinbase and other centralized crypto exchanges come as the digital-asset industry has been hammered by a $2 trillion rout in token prices over the past year. A series of blowups, including the collapse of FTX, have further exacerbated the meltdown.
Coinbase, Crypto.com, and Huobi are some of the largest crypto exchanges that have announced layoffs over the past year. As reported, Coinbase announced its third round of layoffs last week, reducing its headcount by another 950 employees, or 20% of its workforce.
Shares of Coinbase, which went public in April 2021 and hit an all-time high of around $370, have since taken a nosedive, losing almost 90% of their value compared to all-time highs. The company’s shares are currently down by more than 3% as the market is digesting its exit from Japan.
The exchange has also faced some regulatory scrutiny recently. Earlier this month, Coinbase agreed to shell out a total of $100 million to settle a complaint relating to “certain historical shortcomings” in its regulatory compliance work.
In another blow to Coinbase, S&P Global, one of the largest credit ratings providers, downgraded the crypto exchange’s debt one position from “BBB” to “BB-,” moving it from “investment grade” to “speculative grade” on Wednesday last week.
“Coinbase’s trading volumes have weakened meaningfully in the aftermath of the collapse of cryptocurrency exchange FTX (unrated) and regulatory risk is rising, in our view,” the rating agency said.