Crypto Exchange Giant Kraken Shuts Down its Abu Dhabi Branch: What Lies Ahead for the Crypto Market?
Added: (Wed Jul 19 2023)
Pressbox (Press Release) -
Did you know that the recent Kraken crypto market crash has dealt a significant blow to the United Arab Emirates’ bullish stance on cryptocurrency? Amid this challenging landscape, renowned crypto exchange Kraken has made headlines with the closure of its Abu Dhabi office. In a recent development, Kraken, a prominent cryptocurrency exchange, has decided to close its office in Abu Dhabi, as reported by Reuters.
As part of its ongoing commitment to drive cryptocurrency adoption worldwide, Kraken crypto exchange consistently evaluates its business operations. Surprisingly, this closure comes shortly after Kraken obtained regulatory approval to operate in the region, marking an unexpected turn of events in the company’s trajectory.
Cryptocurrency’s Rollercoaster Ride: Kraken’s Footprint in the UAE
Kraken was among the numerous cryptocurrency exchanges that relocated to the United Arab Emirates (UAE) in the previous year. As part of its efforts to diversify its economy, the Gulf state actively seeks to attract technology enterprises engaged in cryptocurrency, blockchain, artificial intelligence, and related sectors. To facilitate this, the UAE implemented a comprehensive regulatory framework for virtual assets, effectively enticing cryptocurrency players to establish a presence in the country. However, the cryptocurrency market experienced a significant downturn, resulting in a substantial devaluation of major cryptocurrencies like Bitcoin, leaving their recovery prospects uncertain.
Kraken Suspends Emirati Dirham Support: Impact on UAE Clients
The Kraken crypto exchange recently announced the suspension of its support for Emirati dirhams, affecting clients in the United Arab Emirates and the broader Middle East. However, users in these regions can still access other Kraken services. Notably, the registry for Abu Dhabi Global Market, where Kraken obtained a crypto license in April of the previous year, no longer lists an active entity associated with the company. Unfortunately, this decision has resulted in significant layoffs, impacting the majority of Kraken’s Middle East and North Africa teams, comprising approximately eight roles.
Kraken’s Shrinking Steps: Layoffs and Revisiting Past Expansion
Following Kraken’s announcement in November to downsize its workforce by 30%, cutting over 1,000 jobs to weather the crypto winter, the move also impacted its operations in the Middle East. Jesse Powell, a co-founder of Kraken, characterized the layoffs as a means to bring the exchange back to its size in 2021 when it experienced rapid expansion. The repercussions of the market crash were felt in the UAE, where additional reports emerged. Bloomberg disclosed that UAE-based companies like BitOasis had to reduce their workforce after the bankruptcy of FTX, a crypto exchange. Notably, numerous crypto funds in the UAE had substantial investments in FTX, as reported by Bloomberg. Despite these challenges, Emirati officials maintain an optimistic outlook on the future of cryptocurrency in the UAE.