TOKYO -- Asia is becoming a less attractive market for large cryptocurrency exchange operators due to regulatory uncertainties. At least three major exchanges have announced or voiced the idea of fleeing the region.

Kraken, a San Francisco-based exchange, in April announced that it will stop offering its services to residents of Japan. The exchange will cease accepting deposits from the country, one of the biggest markets for digital coin trading, around the middle of this month. Trading for existing clients in Japan will be halted in mid-June, and these customers must withdraw their funds by the end of that month.

Kraken forayed into the market in October 2014. Last month, it said "it is impractical to continue service for Japan residents." The decision to leave involved "careful consideration of revenue against the costs and resources required to maintain service," Kraken said.

The world's 13th largest exchange did not go into detail about why it is pulling out of Japan, but revenue does not seem to be the problem. The price of bitcoin, the most popular cryptocurrency, now hovers around $9,000, less than a half of the historical high it reached in December. But bitcoin's daily trading volume, which is what matters to exchanges, has not taken a corresponding drop.

The market suspects that the costs of complying with new regulations in Japan is the main reason for Kraken's departure.

Japan's cryptocurrency community received a shock in January when Coincheck suffered a record hack, losing $530 million worth of clients' NEM tokens. The theft put Coincheck in the headlines, where it stays to this day. Later in January, Japanese regulators strengthened their grip on cryptocurrency exchanges. On April 16, Monex Group, which holds more established online brokerages, bought Coincheck for $33 million. Later in April, Coincheck announced that it made an operating profit of $491 million for the fiscal year through March -- despite compensating its users to the tune of 47.3 billion yen ($432 million) for the NEM hack.

As Japanese regulators began coming down hard on the industry, the country's commercial cryptocurrency exchanges launched a self-regulatory body to regain the confidence of traders.

Although Coincheck's profit shows cryptocurrency exchanges can be high-margin, the costs of running them in Japan is becoming onerous.

"Suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas," Kraken said. "After we have had a chance to better catch to our rapid growth, we will consider the possibility of resuming service for Japan residents."

Hong Kong's cryptocurrency news is even more shocking. Binance, the world's largest digital coin exchange in traded value, is moving out of the special administrative region, where it first opened shop, to blockchain friendly Malta, a dot of a country in the Mediterranean Sea south of Sicily and North of Libya.

China started to more tightly regulate cryptocurrency trading in 2017, when some exchanges were forced to close. Hong Kong's Securities and Futures Commission has also issued warning letters to exchanges for operating without approval. Binance is said to be one of the seven to have received a letter. Japan's Financial Services Agency issued a similar warning to the exchange regarding its availability to traders in Japan.

Malta offers Binance a haven where it can develop its business with less regulatory uncertainties. Maltese Prime Minister Joseph Muscat welcomed Binance's decision. "We aim to be the global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world-class fintech companies," he said.

Another exchange, Bitfinex, is also seeking to evacuate Hong Kong; it appears to be on the way to Switzerland.

For regulatory agencies, protecting retail investors is the utmost priority when new forms of assets begin to take wing. While lowering the bar to allow these fledgling sectors to thrive is not wise, Asian regulators have to get the balance right before more exchanges lose patience and flee to other regions.