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Cryptocurrency exchange Kraken closes Abu Dhabi office

Emirati officials are still bullish about the future of cryptocurrency, but the crash in the market has hit the UAE hard.

A major cryptocurrency platform confirmed on Thursday that it's closing its office in Abu Dhabi. 

Reuters first reported that Kraken shut its office in the Emirati capital. A spokesperson for the firm confirmed the news to Al-Monitor.

“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. 

Kraken also suspended “support” in Emirati dirhams. Clients in the United Arab Emirates and the rest of the Middle East will still be able to use Kraken’s other services, however, according to the statement. 

Why it matters: Kraken was one of several cryptocurrency firms that moved to the UAE last year. The Gulf state is seeking to attract cryptocurrency, blockchain, artificial intelligence and related technology companies as part of its diversification push. The UAE instituted a virtual assets regulatory regimen last year, which helped attract cryptocurrency players to the country. 

However, many prominent cryptocurrencies, such as Bitcoin, plummeted in value last year and have yet to recover. 

The effects of the crash have been felt in the UAE. In addition to the Kraken news, Bloomberg reported in November that some UAE-based firms, such as BitOasis, cut jobs last year following the bankruptcy of the crypto exchange FTX. Many crypto funds in the UAE had invested heavily in FTX, according to Bloomberg. 

Emirati officials are still optimistic about cryptocurrency’s future in the UAE. The country’s AI minister, Omar Sultan Al Olama, said last month at the World Economic Forum that cryptocurrency companies moving to the Emirates is a positive.

The crash has affected firms throughout the Middle East. Israel’s Celsius filed for bankruptcy last July, for example. 

Know more: The “Islamic” cryptocurrency sector is growing in the region as some enthusiasts seek to apply Islamic finance to the technology, Salim A. Essaid reported for Al-Monitor last month. 

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