.There is no doubt that market conditions are contributing to the domino fall of a litany of major players in the crypto industry: from Celsius to FTX and now Kraken. One of the most beloved exchanges out there is facing an existential crisis and, like everyone else, is having to close doors worldwide.
Could this be the beginning of the end of the third most used crypto exchange on the market right now?
The company explained that the decision to exit the Japanese cryptocurrency market is part of its efforts to prioritize resources and investments in areas that align with the company’s strategy and best position Kraken for long-term success.
As a result, Kraken will no longer serve customers in Japan through Payward Asia, the exchange reveals through a statement. Payward Asia Inc. operates Kraken’s services in Japan.
How Long Do Kraken Customers Have in Japan?
Kraken reported that all affected customers have until January 31 to withdraw their holdings in fiat and cryptocurrencies. The deposit feature will be removed on January 9. Finally, Kraken reassured customers that the platform is fully funded to ensure that all affected customers can withdraw assets in a timely manner.
“Since the beginning of this year, macroeconomic and geopolitical factors have weighed on the financial markets. This has resulted in significantly lower trading volumes and fewer client sign-ups. Unfortunately, the negative influences on financial markets have continued, and we have run out of preferable options to align costs with demand.”
In addition, Kraken had already announced in November that it was reducing its global workforce by 30% to about 1,100 people to adapt to current market conditions.
What Options Do Kraken Clients in Japan Have?
Kraken users in Japan have been given until the end of next month to withdraw their fiat and cryptocurrency holdings. They have the option of transferring their cryptocurrency to another wallet or wiring Japanese yen to a local bank. The company advises its Japanese users to take action as soon as possible to avoid any potential delays or issues.
In September 2021, Jesse Powell, cofounder of Kraken, stepped down as CEO. He was replaced by Chief Operating Officer Dave Ripley. Just two months later, the company made the decision to cut 30% of its global workforce. This was because the market continued to struggle following the collapse of rival exchange FTX.
Kraken has stated that it will now prioritize resources and investments to ensure the long-term stability of the exchange. This move is a strategic decision. It’s aimed at allowing the company to allocate resources better and focus on its core operations.
Other Crypto Collapses Started a Chain Reaction
It all started on May 9, when sister cryptocurrencies Luna and UST, or TerraUSD, collapsed. The two tokens crashed after UST lost its peg to the dollar, the foundation qualifying it as a stablecoin.
From May 9 to May 13, at least $55 billion of market cap disappeared. This caused many investors to sustain colossal losses.
The de-pegging of Terra’s UST coin and the collapse of Celsius and 3AC drove massive losses for investors. $20.5 billion was lost in the case of UST. $33 billion was lost in the case of Celsius and 3AC, according to blockchain security firm Chainalysis.
And that is why, ladies and gentlemen, Kraken is failing. The entire crypto industry is struggling, and Kraken just might not make it through this crypto blizzard. As always, only the markets will determine who survives and who gets buried by the colossal amounts of crypto snow.