John Paul M. Joaquin Tech 01.18.2023 08:Jan AM EST

Coinbase To Halt Japan Operations Due to ‘Volatile Conditions’

Coinbase is leaving Japan.

The cryptocurrency exchange platform recently announced it has made the difficult decision to pull out of Japan following the fall of major crypto exchange FTX in September 2022

Cryptocurrency exchanges are currently experiencing a loss of investor appetite caused by the detrimental events in the cryptocurrency market in 2022.

Coinbase Japan Withdrawal Details

Coinbase mentioned in its announcement that it decided to shut down its operations in Japan while also conducting a complete review of its business in the country due to "volatile" market conditions.

The company's exit from Japan follows a similar decision from rival exchange Kraken, which will also cease its operations in Japan in January, per Reuters.

Despite pulling the plug on its Japanese operations, Coinbase assured its customers in Japan that it is making the transition as smooth as possible.

To this end, the company claims to have segregated the Japanese Yen and crypto assets of its customers in custody to comply with regulations, and it is committed to ensuring its customers can withdraw their assets as soon as they can.

Coinbase announced that it is removing its fiat deposit functionality come Jan. 20 JST to prevent anyone from further depositing crypto assets to the company.

Coinbase also stated that customers only have until Feb. 16 JST to withdraw all their fiat and crypto holdings from its platform.

Customers could transfer them to any other Virtual Assets Service Provider, Coinbase Wallet, or any other self-hosted wallet of their choice after doing so.

Japanese Coinbase customers can also choose to liquidate their portfolio and withdraw their money to a domestic bank account.

Customers who were unable to transfer or liquidate their portfolio by Feb. 17 will need to coordinate with the Legal Affairs Bureau to retrieve their assets. Customers should keep in mind that they will be receiving money once they retrieve their assets from the Bureau, as Coinbase would have converted any unclaimed assets into money.

This conversion allows the company to transfer unclaimed assets to a Guaranty Account at the Bureau as legal requirements dictate.

Why Are Crypto Exchanges Going Out Of Business?

Coinbase's leaving Japan isn't much of a surprise. According to a Nikkei Asia report, the company contemplated the withdrawal as part of its response to the sharp decline in cryptocurrency trading following the collapse of FTX.

The fall of FTX, which was previously known as the third-largest centralized crypto exchange per the New York Times, detrimentally affected the crypto market. After FTX's bankruptcy, investors lost their appetite for funding cryptocurrencies due to their volatile nature.

Additionally, higher interest rates and worries of an economic downturn provided more reasons for investors to keep their money rather than invest them in an unstable asset.

As a result, Coinbase, Crypto.com, and Huobi announced plans to lay off about 20% of their respective staff to cut costs following their sudden growth during the COVID-induced lockdowns of 2020 and 2021.