After announcing its decision to lay off more than 20% of its workers, Coinbase will quit its operations in Japan. The crypto exchange cited weak economic conditions caused by the bear market as the major factor for the decision.
In an official press statement released on Wednesday, Coinbase said they made the difficult decision due to the effects of the bear market. They stated that the bear market forced them to review their operations in the Asian country thoroughly. A few weeks ago, Coinbase job cuts made the news after the company's executive announced the company had been forced to lay off about 20% of its workforce.
"Due to market conditions, our company has made the difficult decision to halt operations in Japan and to conduct a complete review of our business in the country. However, we are committed to making this transition as smooth as possible for our valued customers," Coinbase said.
They also mentioned customers still have time to make fiat deposits in the crypto exchange until January 20th, 2023 JST. "Due to market conditions, our company has made the difficult decision to halt operations in Japan and to conduct a complete review of our business in the country. However, we are committed to making this transition as smooth as possible for our valued customers," Coinbase added.
Coinbase Japan customers have been given a deadline of February 16th, 2023 JST to withdraw whatever crypto assets or funds they may have in the crypto exchange. The exchange also gave Coinbase Japan customers options for withdrawing their funds. "Customers can choose to withdraw their crypto holdings to any other Virtual Assets Service Provider, Coinbase Wallet or any other self-hosted wallet of their choice. Alternatively, customers can choose to liquidate their portfolio and withdraw their JPY to a domestic bank account," the exchange explained.
Coinbase is Becoming a Weakling in the Industry
The global economic crisis and the bear market of 2022 brought Coinbase to its knees, which is the major factor that made them close Coinbase Japan. In the past weeks, the news of Coinbase job cuts reached the public after the company executive confirmed they would relieve about 20% of the workers of their duty.
Things weren't this way for Coinbase in the past. They were often dubbed as one of the fastest-growing crypto exchanges in the past. Coinbase shares went public in April 2021 and hit an all-time high of around $370. However, things have taken a downturn as their shares are currently struggling to stay above $50. After the news of their Japan branch closure hit the public, their shares have been down by more than 3%.
The layoff, which they announced recently, was their third round of layoffs. How bad could things get for the crypto exchange?
Coinbase debt one position rating has also been downgraded by S&P Global, one of the largest credit ratings providers. According to the new ratings, Coinbase moved from "BBB" to "BB-". In other words, the company's debt one position has moved from investment grade to speculative grade.
S&P Global explained the new ratings saying, "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."