American-based crypto exchange Coinbase is set to shut down bulk operations in the Japanese market. A recent statement by Nana Murugesan, the crypto exchange’s head of business development and international operations, revealed plans to wind down a substantial portion of its current operations in Japan.
Coinbase Shutting Down Operations
Murugesan admitted that the shutdown of most operations in Japan prompted the elimination of roles in the Asian market. The executive indicated that Coinbase would retain a small crew tasked with safeguarding the customer assets during the transition.
Nevertheless, Murugesan was noncommittal on whether the Japanese entity is considering a potential merger and acquisition.
The update offered by Murugesan failed to disclose the number of employees affected by the exit from the Japanese market.
Potential Misunderstanding with Japan’s FSA
The exit from the Asian market portrays a contrasting development for the Nasdaq-listed crypto exchange that earned a license on June 18, 2021. Coinbase representatives lauded the approval of its operations by the Financial Services Agency (FSA), citing Japan as a critical market.
The announcement by Coinbase indicating transitioning from Japan reignites the debate that regulation and government policies hold critical influence that will shape the crypto industry in 2023.
Murugesan’s update emphasized that Coinbase Japan will proceed with the scaling operations till it concludes talks with the FSA. He echoed the previous update that the entity’s chief executive Nao Kitazawa was heading the talks whose conclusion will influence the subsequent phases.
Troubled Coinbase Start in 2023
Coinbase is beginning the year 2023 with a series of developments with adverse outcomes. After agreeing to a $100 million settlement over violating New York financial regulations, the crypto exchange is in the spotlight.
The Finance department in New York alleged Coinbase programs contravened the state’s banking law alongside regulations on virtual assets, transaction oversight, and cybersecurity. The violation cost Coinbase $50 million in a penalty and an equivalent amount to fostering compliance programs.
Coinbase Downgraded to Speculative Level
Barely two weeks into 2023, Coinbase announced reducing its headcount by 950 employees. The announcement rubbed wounds on the victims following another 1100 ousted in June 2022.
The 20% layoff prompted S&P Global to downgrade the crypto exchange’s credit rating to BB- from BBB. S&P cited shrinking trading volumes and increased regulatory attention in relegating Coinbase to a speculative grade from the previous investment level.
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