Coinbase Follows Kraken to Japan Exit

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Cryp­tocur­ren­cy exchange Coin­base is wind­ing down its busi­ness in Japan after lay­ing off more than 950 peo­ple in its most recent round of job cuts

The exchange said in a Wednes­day blog that it will ter­mi­nate trans­ac­tions with cur­rent cus­tomers, who have until Feb. 16 to with­draw their assets.

“All Coin­base, Inc. cus­tomers can with­draw fiat cur­ren­cy and cryp­tocur­ren­cy hold­ings from Coin­base by Feb­ru­ary 16th,” the com­pa­ny said.

Cus­tomers can either choose to liq­ui­date their hold­ings or with­draw Japan­ese Yen to their local bank account. They won’t be able to make fiat cur­ren­cy deposits after Jan. 20. 

After the dead­line, any remain­ing cryp­toas­sets will auto­mat­i­cal­ly be con­vert­ed into the local cur­ren­cy, and these will be deposit­ed with the Legal Affairs Bureau in line with the law.

Indus­try rival Krak­en also announced at the end of Decem­ber that it would pull out of Japan by the end of Jan­u­ary, say­ing the resources need­ed to grow its busi­ness there weren’t jus­ti­fied at the time.

Coin­base laid off more than 2,000 peo­ple in the last year as exchanges nav­i­gat­ed tur­bu­lent mar­kets and low­er rev­enues from an inten­si­fy­ing cryp­to win­ter, that has left its stock price vul­ner­a­ble to peri­ods of sig­nif­i­cant volatility. 

Rat­ing agency S&P Glob­al recent­ly down­grad­ed Coinbase’s long-term issuer cred­it rat­ing, cit­ing slow cryp­to trad­ing vol­umes and ris­ing reg­u­la­to­ry risks. How­ev­er, BTIG ana­lysts said in a Jan. 16 note that cer­tain fac­tors could boost the com­pa­ny and its stock in 2023.

Coin­base has the advan­tage of mar­ket share as a result of FTX’s col­lapse, BTIG said. In fact, the exchange’s mar­ket share is said to have increased from 29% in Octo­ber to 39% in December.

“Our bull­ish the­sis for [Coin­base] shares at this point is anchored by two beliefs: that the company’s liq­uid­i­ty should pro­vide it with the run­way it will need to sup­port its oper­a­tions until the next dig­i­tal asset bull mar­ket begins, and that its sta­tus as a safe haven will enable it to emerge from the ongo­ing shake­out with­in the cryp­to exchange space in a posi­tion of strength,” BTIG ana­lysts Mark Palmer, Andrew Harte, Thomas Smith wrote.

Coin­base shares are down 76% in the last 12 months, but are up 43% in the last week alone, accord­ing to data from Trad­ingView.


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