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Setback for ‘Saudi Vision 2030’? Crypto firm Kraken closes UAE office

IFM_Crypto Firm Kraken
The Kraken episode comes at a time when the crypto sector is undergoing prolonged negative volatility since 2022

Amid the legal saga over the closure of crypto giant FTX, another digital currency exchange firm Kraken has now cut roughly eight posts from its Middle-East and North African staff, as per reports. Kraken got a cryptocurrency licence from Abu Dhabi Global Market in April 2022, but a registry for the market no longer lists a functioning organisation by that name.

The site will still be accessible to customers in the MENA region even though the crypto exchange has stopped supporting transactions in the currency of the dirham. According to a company spokesperson, customer deposits made in the UAE currency would be automatically translated to dollars and subsequently available for withdrawal purposes. Customers can continue utilising other fiat currencies that Kraken accepts.

“Kraken regularly reviews its business lines to ensure we’re employing resources globally to best achieve our mission of accelerating the adoption of cryptocurrency,” Kraken said in a statement sent to Al-Monitor.

The Kraken episode comes at a time when the crypto sector is undergoing prolonged negative volatility since 2022. Apart from the FTX saga, the sector also saw company shutdowns and a wave of layoffs. Crypto.com and Gemini have recently announced significant cost-cutting initiatives as well. Despite the prices of digital tokens gaining some ground in 2023 beginning, trading volumes are still low due to poor confidence among the clients and stakeholders, thus hurting the exchange revenues even more.

Kraken intends to keep staff in the MENA region. However, reports also indicated that after helping with the transfer, Kraken’s managing director for the area, Benjamin Ampen, will likely part ways with the company.

Kraken, like Coinbase, has scaled back its intentions for international expansion and ended operations in Japan at the end of January 2023. In addition, due to “current market conditions,” the company announced plans to reduce 30% of its global staff, or about 1,100 employees, in November 2022.

The decision to shut down the UAE office comes three weeks after Kraken announced the appointment of an independent member, Dan Ciporin, to its board of directors. Dan is the CEO of Home Plate Acquisition and the former CEO of shopping.com.

According to Jesse Powell, founder and CEO of Kraken, “Dan has a proven track record of identifying long-term winners within technology markets that transform the way we connect and transact.”

Kraken was one of several cryptocurrency firms that moved to the UAE in 2022. The Gulf state is seeking to attract cryptocurrency, blockchain, artificial intelligence and related technology companies as part of its diversification push under ‘Saudi Vision 2030’. The UAE instituted a virtual assets regulatory regimen in 2022 as well, which helped attract cryptocurrency players to the country.

However, things have changed since 2022; with many prominent cryptocurrencies saw their values plummeting. The impact of this phenomenon has affected UAE economy as well. Bloomberg reported in November 2022 that some UAE-based firms, such as BitOasis, cut jobs after the FTX bankruptcy.

Despite the crypto sector’s ongoing turbulence, Emirati officials are still optimistic about the sector’s future in the UAE. The country’s Artificial Intelligence minister Omar Sultan Al Olama informed the World Economic Forum recently that cryptocurrency companies moving to the Emirates is a positive for the nation.

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