U.S.-based crypto exchange Coinbase will scale back most of its operations in Japan, according to a recent statement by the company’s vice president for business development and international, Nana Murugesan.
Murugesan said in an interview Wednesday: “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.” He declined to comment on merger and acquisition activity regarding the Japanese entity.
While Murugesan did not give details about how many Japanese employees are affected by the announcement, he did say that a small crew will remain committed to the security of customers’ assets.
The Nasdaq-listed Coinbase exchange was licensed to service Japanese customers on June 18 last year, after registering with the country’s Financial Services Agency (FSA), the country’s leading financial regulator.
Regulation and policy is going to be the factor that most meaningfully shapes the crypto industry in the next few years. On a panel at Messari Mainnet 2022, Coinbase US policy chief Kara Calvert, Haun Ventures chief policy officer Tomicah Tillemann, and Crypto Council for Innovation CEO Sheila Warren gazed into the policy crystal ball with Decrypt's Dan Roberts.
Murugesan stressed that Coinbase Japan is in a transition period until talks with Japan’s FSA are concluded. The entity’s Chief Executive Officer Nao Kitazawa is driving the talks and will announce his next step “afterward.”
Coinbase’s hectic 2023
Barely a fortnight into the New Year and Coinbase is rarely out of the spotlight. Last week, the company agreed to pay a $100 million settlement with The New York Department of Financial Services over issues regarding the company’s compliance programs.
The department claims it found “significant failures” in Coinbase’s compliance program that violate New York Banking Law and state regulations regarding virtual currencies, money transmitting, transaction monitoring, and cybersecurity.
Kara Calvert, Head of U.S. Policy at Coinbase, talks with Decrypt's Dan Roberts and Stacy Elliott in our Decrypting Mainnet series at Mainnet 2022 to talk about the proposed legislation she's tracking, how Coinbase is navigating regulation, and wanting to see a replacement for the SEC's Howey Test.
As a result, Coinbase will pay $50 million as a penalty and will invest the additional $50 million in bolstering its compliance program to include transaction monitoring and know your customer (KYC) rules.
On Tuesday this week, Coinbase announced another massive round of layoffs, which will see 950 employees lose their jobs in the downsizing. This comes seven months after a previous round of downsizing ousted 1,100 employees—about 18% of the workforce at the time.
Crypto exchange Coinbase today announced more sweeping layoffs, citing "the ongoing market conditions impacting the cryptoeconomy."
In an 8-K filing with the SEC, the firm said that this restructuring would cut the firm's headcount by approximately 950 employees. The cost to do so, tallying severance packages, could range up to $163 million.
The layoffs are expected to conclude by the second quarter of 2023, the filing continues.
‘Financial Regulators Should Be Limited to Centralized Actors’: Co...
Then on Wednesday S&P Global downgraded Coinbase’s credit rating from “BBB” to “BB-,” moving it from “investment grade” to “speculative grade.”
S&P pointed to “weakened” trading volumes at the exchange and increased levels of regulatory attention following the high-profile collapse of FTX in November 2022.
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