The market is still processing the company's exit from Japan, which has caused the share price to drop by more than 3%.
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Coinbase, a crypto exchange, is leaving Japan due to market conditions. The decision follows just days after the company announced its third round of layoffs in less than a year as the market continues to decline.
The exchange stated in a blog post on Wednesday that due to market conditions, it has made the "difficult decision" to suspend operations in Japan and perform a comprehensive review of its business in Japan.
Recently, rival exchange Kraken announced similar plans to stop operations in Japan, noting a combination of "current market conditions in Japan" and a "weak crypto market globally" as the causes of its decision.
Coinbase stated that it is seeking to make the "transition as smooth as possible." The exchange noted that fiat deposit functionality would be terminated on January 20th, and customers will have until February 16th to withdraw all of their fiat and crypto holdings.
Coinbase executive Nana Murugesan stated last week that the exchange's Japanese subsidiary is suspending most of its operations in an interview with BNN Bloomberg. Murugesan remarked at the time, "We’ve decided to wind down the majority of our operations in Japan, which led to eliminating most of the roles in our Japan entity."
The severe measures taken by Coinbase and other centralized crypto exchanges come as the digital asset sector has been significantly affected by a $2 trillion crash in token prices over the past year. The breakdown has been exacerbated by several blowups, namely the collapse of FTX.
Coinbase, Crypto.com, and Huobi are among the largest crypto exchanges that have announced layoffs during the last year. According to reports, Coinbase announced its third phase of layoffs last week, eliminating 950 more employees, or 20% of the workforce.
Coinbase shares, which went public in April 2021 and reached an all-time high of about $370, have since dropped, declining nearly 90% of their value when compared to all-time highs. The market is still processing the company's exit from Japan, which has caused the share price to drop by more than 3%.
The exchange has recently come under some regulatory investigation. Coinbase agreed to pay a total of $100 million to settle a complaint about "certain historical shortcomings" in its regulatory compliance work earlier this month.
Another setback for Coinbase came on Wednesday last week when one of the major credit rating providers, S&P Global, downgraded the crypto exchange's debt position from "investment grade" to "speculative grade" and reduced its rating from "BBB" to "BB-."
The rating agency noted that "Coinbase's trading volumes have weakened meaningfully in the aftermath of the collapse of cryptocurrency exchange FTX (unrated), and regulatory risk is rising, in our view."