“Due to market conditions, our company has made the difficult decision to halt operations in Japan and to conduct a complete review of our business in the country. However, we are committed to making this transition as smooth as possible for our valued customers,” - says an official announcement on the company’s website.
All Coinbase Japan customers will have until February 16th, 2023 to withdraw their fiat and crypto holdings. The remaining crypto assets will be converted to Japanese yen and sent to the Legal Affairs Bureau.
This step is similar to the one of Coinbase’s competitor Kraken, which decided to stop its operations in Japan on Dec 28 2022. Kraken blamed current market conditions in Japan in combination with a weak crypto market.
Japan is among the most crypto-unfriendly countries when it comes to residents’ taxation, according to the Coincub report: anyone earning cryptocurrency worth over approximately 1,500 USD can be taxed at a rate of up to 55%. Also, Japan is not among the top-countries for crypto use: the latest data from Statista says that roughly 4% of Japanese people are using crypto. These factors may be among the reasons for the crypto exchanges leaving the country.
The fact that one of the crypto leaders has to scale down is worrisome [but not surprising]. Another sign that Coinbase suffers from the crypto winter is that recently the exchange announced that it will cut 20% of its workforce which is around 950 people.
We recently wrote that Coinbase‘s stock reached a new low after the FTX collapse. At the moment Coinbase’s share price has avoided collapse, but we suppose that any negative news could provoke a new wave of panic selling and lead to another downturn. Surprisingly since the announcement about layoffs was made the companies share price has mainly been going up: a rise of around 20% from Jan 10 to Jan 24. The news about halting the withdrawals also did no harm to company shares. That might indicate that customers and investors are keeping strong faith in the exchange.
We will keep a close eye on the performance of Coinbase, and their competitors, so stay tuned! And while you await more news from us, you may want to check out a new Amazon documentary about Coinbase - we found it interesting.