Last year, a new Japanese law came into effect that required Airbnb hosts to register their properties through the government and publicize their license number by June 15 in order to remain active on the platform. In a written statement by Airbnb released Friday morning, the company confirmed that thousands of hosts had already updated their listings with the necessary registration information, but “many more” were still in the process of finalizing their registrations.

Many were shocked on June 1, two weeks before the confirmed deadline and at the peak of the tourist season, when Japan’s tourism agency issued a sudden memo declaring that any Airbnb host without a license, regardless of their current status in the registration process, must cancel any upcoming reservations booked before June 15. As a result, thousands of Airbnb listings in Japan, a rapidly-growing market for the startup, vanished from the site.

“This announcement came as a surprise to us,” said Airbnb. “It was contrary to the guidance our team had previously been given by the Japanese Tourism Agency (JTA) and put the travel experiences of thousands of visitors to Japan at risk.”

To compensate for the burden the sudden policy-shift has placed on would-be travelers, Airbnb has created a $10 million fund to cover additional expenses, including flight costs, for guests whose plans had been thwarted due to a cancellation. Additionally, Airbnb intends to offer full-refunds on top of a $100 coupon for other Airbnb experiences.

“We are pretty confident that we will grow back,” Mike Orgill, the company’s head of public policy for the Asia Pacific, told Bloomberg.

But, the stringent Japanese policies seem to have affected Airbnb immensely. According to a report by the Nikkei Asian Review, Airbnb has been forced to remove 80% of Japanese listings in the past few months alone — plummeting from 62,000 listings to 13,800 since spring.

“While this is a difficult time for our hosts and guests, we believe the new rules will ultimately be a positive change for Airbnb and our Japan community,” said Airbnb. “There will undoubtedly be a period of adjustment, but ultimately, clear rules and regulations for home sharing will make our community in Japan bigger and stronger.”

Airbnb launched in Japan in 2013. It is yet to be seen how the company will recover from this setback to further their growth in the nation, one of the world’s fastest-growing markets for tourism.