Bad news for crypto exchange Coinbase, as it recently announced that it is considering withdrawing from the market in Japan.
The collapse of FTX has been a major blow to US exchanges. Coinbase continues its downward trend and doesn’t seem to be stopping. After laying off many of its team members, the news of a possible Japanese withdrawal may not go down well with Coinbase in the exchange world.
Why does crypto exchange Coinbase want to withdraw from the market in Japan?
Since 2021, the California-based exchange has expanded its business in Japan through a series of partnerships and companies. The partnership with Mitsubishi UFJ Financial Group is the spearhead of business in Japan. Back in 2016, the Japanese company set its sights on Coinbase, investing about 1 billion yuan, or the equivalent of almost $8 million in. Coinbase.
A January 13 report by Nikkei Asia announced Coinbase’s intention to exit the Japanese market. In fact, the San Francisco-based company is considering several alternatives to move from its market operations in Japan. Among the many options is selling the company and giving up the recording license..,
Murugesan, the company’s vice president for international business development, said in an interview Wednesday:
“We decided to reduce most of our operations in Japan, which resulted in eliminating most of our roles in the Japanese entity.”
He declined to comment on M&A activity regarding Japanese entities.
Murugesan emphasized that Coinbase Japan is in a transition period until negotiations with Japan’s Financial Services Agency (FSA) are completed.
Coinbase is in the spotlight from early 2023
It began very frantically for Coinbase in 2023, which has rarely been out of the news and involving scandals. Since the news about layoffs, US companies have started a very negative trend.
The influence of FTX has undoubtedly affected many, all industries have been affected, but some, like Coinbase, are struggling to recover.
Last week, Coinbase agreed to pay $100 million in debt to the New York Department of Financial Services due to problems with the company’s compliance program.
Department Supervisor Adrienne Harrissaid:
“It is critical that all financial institutions protect their systems from bad actors, and the Department’s expectations for consumer protection, cybersecurity and anti-money laundering programs are just as strict for cryptocurrency companies as they are for traditional financial service institutions.
Coinbase failed to build and maintain a functional compliance program that could keep up with its growth. This failure has exposed the Coinbase platform to potential criminal activity that requires the Department to take immediate action, including the installation of independent monitors.
Coinbase violated several New York banking laws as well as related state regulations crypto, information monitoring and cybersecurity. Coinbase has not been able to keep up with the growth in the volume of tokens generated by its TMS.
By the end of 2021, Coinbase’s inability to track these alerts resulted in a significant backlog of more than 100,000 transaction monitoring alerts that had yet to be reviewed.
Meanwhile, this week, Coinbase found itself in another round of layoffs, its staff cuts continuing yet again.
In short, it’s really not a good time for one of the most important exchanges in the cryptocurrency industry. It should be a bearish period holding back in this downtrend. In the meantime, let’s follow the news and insights related to the case, with the hope that 2023 will also be positive for the US exchange.