This year, several crypto exchanges experience the heat of the prolonged bear market.
Kraken, a US-based cryptocurrency exchange, announced that it would exit Japan by the end of January 2023.
The exchange had previously announced plans for massive layoffs.
The exchange said the decision is in line with the company's global strategy of prioritizing resources.
In line with this, Kraken, a US-based crypto exchange, is currently experiencing the repercussions of the global crypto market downturn. On November 30, the exchange announced that it would lay off approximately 1,100 employees, lowering its staff by 30%.
And now, reports surfaced that the exchange is planning to exit the Japanese crypto market. Experts anticipate that the exchange is experiencing a liquidity crisis after the fallout of multiple crypto exchanges. However, Kraken denied the claims, asserting that the exchange has sufficient financial liquidity.
Kraken announced in a blog post on Dec 28 that it would quit the Japanese market by the end of January 2023. The announcement comes amid an unfavorable market outlook and continued price drops.
In a translated release, Kraken Japan stated, "Based on the current Japanese industry landscape and the worldwide crypto market downturn, we concluded that it would be difficult for Kraken to invest in the resources required to continue building its Japan business."
It further stated that the decision is in line with Kraken's global policy of allocating resources to the company's long-term performance. Meanwhile, Payward Asia, the operator of Kraken Tokyo, will allow users to withdraw or transfer funds until the closure deadline. The exchanges also noted,
“It's been a long year. Every day, the crypto market changes, but this year felt like a roller coaster. The best part? This change brings us closer to a future in which cryptocurrency is widespread and financial equality is vital. And we appreciate you coming along for the ride.”
The tweet from the exchange is in line with building confidence in the crypto community in the midst of the crypto market downturn. However, the exchange's announcement of massive layoffs and Japanese market exit has raised concerns about the exchanges' survival chances in this crypto winter.
After the FTX meltdown, several crypto exchanges realized that they would face a harsh liquidity crisis in the future. Before that, the collapse of Terra Luna and the bankruptcy of Celsius both rattled the market in 2022.
However, Kraken assured the crypto community that the decision to withdraw from Japan will not affect the exchange's worldwide operations. The exchange noted that "Kraken has adequate financial liquidity to face any liquidity crisis in the future.”
This indicates that the exchange will undoubtedly survive the ongoing crypto winter, but what the future has in store for the crypto exchange remains to be seen.
What do you think, will the Kraken survive the ongoing bear market, or will it face a liquidity crisis in the times to come? Please share your valuable thoughts in the comment section below.
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