As a part of its reaction to the steep decrease in cryptocurrency trading that followed the collapse of FTX, Coinbase (NASDAQ: COIN) is mulling the possibility of withdrawing from the Japanese market.
The cryptocurrency exchange that is based in the United States began doing business in Japan in 2021 via cooperation with the Mitsubishi UFJ Financial Group. In 2016, the latter company invested more than CNY 1 billion yen ($7.74 million) in Coinbase.
In particular, Coinbase is considering a number of alternatives with respect to the company’s Japanese operation, including the possibility of selling the firm or giving up its registration license, according to a report by Nikkei Asia on January 13.
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In its third wave of layoffs since last summer, cryptocurrency exchange Coinbase said on January 10 that it would reduce its worldwide workforce by around 950 employees, or 20%, by the end of June.
Coinbase impacted by FTX fallout
According to CoinMarketCap, the worldwide market capitalization for cryptocurrencies saw a decline of about 20% when FTX, filed for protection from creditors in November. Coinbase is reevaluating its business in Japan in light of the likelihood that regulatory expenses may likely increase.
According to comments made by Coinbase CEO Brian Armstrong in a blog post published on January 10, the cryptocurrency market “saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.”
Previously, in June 2022, the firm revealed plans to terminate the employment of 1,100 workers. Subsequently, in November 2022, the company terminated the employment of dozens of employees, including key executives.
Meanwhile, at the end of this month, the Payward group, which runs the Kraken cryptocurrency exchange and is located in the United States, will shut down its operations in Japan. Payward is requesting that clients who may have been impacted move any residual crypto assets they own onto digital wallets hosted by third-party services and redeposit any yen they may have had into personal bank accounts.
If Coinbase were to deregister, it is anticipated that the company would behave in a similar manner.