As the crypto winter begins to thaw, there is one company left in ruins: Coinbase. The United States publicly traded company has faced a litany of closures, hiring freezes, layoffs, and is now officially exiting the third largest economy of the world.
In a Wednesday blog post, the exchange said it has made the “difficult decision” to halt operations in Japan. They’ll conduct a complete review of their 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. Kraken cited a combination of “current market conditions in Japan”. A “weak crypto market globally” was also mentioned as a reason behind its decision.
How Long Do Coinbase Customers Have in Japan?
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. 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 are of no surprise. They come as the industry has been hammered by a $2 trillion rout in token prices. A series of blowups, including the collapse of FTX, have further exacerbated the meltdown.
Coinbase Joins Other Exchanges in Massive Layoffs
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. This will reduce its headcount by another 950 employees, or 20% of its workforce.
Shares of Coinbase went public in April 2021 and hit an all-time high of around $370. They’ve 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. Coinbase agreed to shell out $100 million to settle a complaint. This was related 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.
“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.
Are the Customers in Japan Left Holding the Bag?
Coinbase customers in Japan will be able to withdraw their funds without hassles from now until February 16th. The withdrawals can be made either in crypto to an external wallet or via fiat currency. The trading platform noted that users who refuse to withdraw their funds by the stated date will have to liaise with Japan’s Legal Affairs Bureau.
“All Coinbase Japan customers will have until February 16th, 2023 JST, to withdraw their fiat and crypto holdings from Coinbase. Customers can choose to withdraw their crypto holdings to any other Virtual Assets Service Provider, Coinbase Wallet, or any other self-hosted wallet of their choice. Alternatively, customers can choose to liquidate their portfolio and withdraw their JPY to a domestic bank account,” the exchange said in its announcement.
Coinbase said deposits for fiat currencies will be deactivated on January 20th. However, Coinbase reassured that it is very much committed to seeing that all customers are properly cared for during this transition period. That only leaves a little time. Let’s hope that the customers in Japan are allowed their crypto dignity.
