Crypto exchange Coinbase is shutting down most of its operations in Japan

US-based cryptocurrency exchange Coinbase is shutting down most of its operations in Japan to adjust international investment amid a slump in the digital asset sector. The shift comes as the company is shedding 20 percent of its workforce worldwide, the latest layoffs at the San Francisco-headquartered company. Coinbase is downsizing in Japan, despite the nation relaxing some crypto rules, prompting rival Binance — the largest digital asset exchange — to seek a license to return to the country.

“We have decided to close the majority of our operations in Japan, which has resulted in most roles being eliminated in our Japanese unit,” Nana Murugesan, vice president of business development and international, said in an interview on Wednesday. He said Coinbase would not comment on possible merger and acquisition activity when asked if the Japanese entity could be sold.

The digital asset industry has been hit by a $2 trillion (roughly 163 lakh crore) token price failure from a 2021 peak and a series of explosions, most recently the company’s bankruptcy FTX Exchange. This has triggered a series of layoffs crypto companies.

coin base laid off about 950 employees worldwide, a move that Chief Executive Officer Brian Armstrong said was necessary to weather the industry downturn. He added that several projects with less chance of success would be shelved.

Murugesan did not say how many Japanese employees have been affected and said a small number remain to ensure the safety of customers’ assets.

He added that Coinbase is in a transition phase pending talks with the Japan Financial Services Authority. Japan Chief Executive Officer Nao Kitazawa is involved in these talks and his next steps will be determined thereafter, Murugesan said.

Coinbase previously partnered with Mitsubishi UFJ Financial Group to launch a crypto exchange in Japan in 2021. The company has long focused on increasing its presence abroad, with Armstrong saying, “International expansion is truly at the core of our mission to increase economic freedom in the world. ”

barriers to expansion

Coinbase faces obstacles in its quest for global growth. A potential deal to acquire Brazilian crypto broker 2TM Participacoes SA fell through last year. Coinbase also halted a crypto buying service in India after being pressured by the company’s central bank.

Murugesan said Coinbase remains committed to global expansion, describing developments in Japan as “an example of right-sizing.” The company is “willing to make difficult decisions to ensure our investments are aligned with local market opportunities,” he said.

Earlier, a spokesman for the Japanese entity said that “no decisions have been taken at this time beyond staff reductions,” adding that “we are carefully evaluating all options.”

In June, Coinbase announced it would lay off 18 percent of its workforce, which translates to about 1,200 employees. Another 60 jobs were cut in November.

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