Ali Raza
The Kraken cryptocurrency exchange has announced plans to close its Abu Dhabi office. The closure comes less than a year after the exchange secured a license to operate in the region. Kraken is shutting down its offices in the country to deal with the market shock caused by the bankruptcy of FTX.
Kraken shuts down its office in Abu Dhabi
Kraken is one of the largest cryptocurrency exchanges, but it has not been spared from the effects of the bear market that rocked the crypto industry in 2022. Last year, the company announced plans to lay off 30% of its employees amid rising rates hiked by the Federal Reserve and uncertainty in the crypto market.
A Bloomberg report has revealed that Kraken plans to shut down its operations in Abu Dhabi. The company will also fire eight people working in the Middle East and North America (MENA) market.
In April last year, Kraken obtained a license to operate in the Abu Dhabi international financial center and the Abu Dhabi Global Market. The exchange will also be halting support for the dirham, also known as AED. The existing users in the region can still make crypto trades on the platform using other currencies.
The closure of operations in Abu Dhabi is part of the drastic measures that Kraken has taken to withstand the bear market’s effects and continue operations. In December, the exchange’s CEO, Jesse Powell, said that the exchange was laying off employees to return the size of the workforce to what it was in 2021 before the company’s rapid growth.
Rough day at @krakenfx. Headcount rolled back 12 mos. Macro was already tough and we held out but recent industry woes diminished near-term optimism about a crypto rebound. Better positioned now. Glad we were able to take good care of our former colleagues. Been a privilege. ♂️ https://t.co/xfwShapS2N
— Jesse Powell (@jespow) November 30, 2022
“Macro was already tough, and we held out but recent industry woes diminished near-term optimism about a crypto rebound,” Powel said.
Abu Dhabi marks the second market that Kraken is leaving this year. On January 31, Kraken halted operations in Japan. The withdrawal marked the second time that Kraken was leaving the Japanese market. The company explained that it was halting its operations in Japan because of the market conditions in the country and the bearish crypto market.
Effects of the bear market are still being felt
The cryptocurrency market has reported a remarkable recovery this year. Bitcoin has been up by double-digits since the year started, and the global cryptocurrency market cap has increased to above $1 trillion. However, the contagion of FTX’s bankruptcy appears to be at play.
Everlend Finance, a decentralized finance (DeFi) protocol running on the Solana blockchain, recently announced that it was shutting down its operations. The platform alerted its users about the planned closure on February 1, saying that while it had enough funds to sustain operations, it would be a gamble to continue operating under the current market conditions.
We are deeply saddened to announce that as of today our team has decided to close down https://t.co/UiTuuSdyrB and won’t continue its development
— Everlend (@EverlendFinance) February 1, 2023
Everlend Finance has placed user accounts on a withdraw-only mode. It will also cover the raised and unused funds in the next two weeks. The closure follows the Friktion platform announcing it would shut down operations because of the tough conditions in the DeFi market.
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This article was written for Business 2 Community by Ali Raza.
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