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Kraken quits Japan, leaving Binance in control

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(Kitco News) - U.S. cryptocurrency exchange Kraken has announced that it will be leaving Japan. “We would like to inform you that after due consideration, Kraken has decided to cease its operations in Japan and deregister from the Financial Services Agency (JFSA) as of January 31, 2023,” the company wrote in a blog post on Dec. 28.

Kraken said that the combination of a weak global crypto market and challenging market conditions in Japan itself “mean the resources needed to further grow our business in Japan aren’t justified at this time.”

The exchange wrote that Kraken clients will have until Jan. 31, 2023 to withdraw all fiat and crypto holdings from the platform. “You may choose to either withdraw your crypto holdings to an external wallet or liquidate your portfolio and withdraw your JPY to a domestic bank account,” they wrote.

Kraken said that they are coordinating the shutdown with the Japanese Financial Services Agency (JFSA), and that the exchange “is fully funded to ensure all affected clients can withdraw their assets in a timely manner.” Kraken will also remove withdrawal limits for the month of January so clients can remove all their funds.

Deposit functionality will be removed on Jan. 9, but trading functionality will remain active so clients can convert their balance to the asset of their choice ahead of withdrawal. “Funds currently staked with Kraken can be unstaked and transferred or converted as desired,” they wrote. “Kraken will soon be distributing additional info regarding the ETH unstaking process shortly.”

On Jan. 31 the deregistration will be completed, and on Feb. 1, any non-JPY fiat and crypto holdings remaining on Kraken’s Japan exchange will automatically be converted to JPY.

Kraken said that after deregistration they will send all the remaining JPY to a Guaranty Account at the JFSA’s Legal Affairs Bureau, after which Kraken will no longer be able to support Japanese client withdrawals. “If you do not take any action before January 31, you will have to coordinate with the Legal Affairs Bureau on how to retrieve your JPY balance,” they wrote.

The shuttering of Kraken’s Japan operations further bolsters Binance’s position as the preeminent global crypto exchange. Binance has acquired a staggering 75% market share of all exchange transactions as of November following the collapse of rival FTX, according to data from Cryptocompare.

On Nov. 30, Binance announced that they acquired 100% of Sakura Exchange BitCoin (SEBC), meaning the exchange is now operating in the Japanese market as a Japan Financial Services Agency (JFSA) regulated entity.

Binance was forced to exit Japan in 2018 after the JFSA accused it of operating without a license. The regulator issued another warning in 2021 that Binance was still doing business with Japanese customers.

With the Sakura purchase, Binance has now secured regulatory approvals or authorizations in France, Italy, Spain, Bahrain, Abu Dhabi, Dubai, New Zealand, Kazakhstan, Poland, Lithuania, and Cyprus. SEBC represents Binance’s first license in East Asia.

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