After confirming that its customers’ assets are not included in FTX’s bankruptcy proceedings, the Japanese division of the now-defunct FTX cryptocurrency exchange has released a roadmap for restarting withdrawals.
On December 1, the company updated its website, stating that it had been able to confirm that its customers’ assets shouldn’t be included in FTX Japan’s estate because of Japanese laws requiring cryptocurrency exchanges to keep client funds separate from their own assets.
The legal team representing FTX Group in the Chapter 11 bankruptcy proceedings, Landis Rath & Cobb LLP, said this.
After acquiring Japanese cryptocurrency exchange Liquid on February 2, FTX Japan was only established in June of this year. Its purpose was to assist the Japanese clients of the exchange.
However, withdrawals at FTX Japan were stopped on November 8 in a manner similar to that of its parent company due to liquidity problems experienced by that company in early November.
The Financial Services Agency of Japan declared on Nov. 10 that it had taken administrative action against FTX Japan and instructed it to halt all other business operations while adhering to a business improvement order. This announcement came a few days later.
The business was then included in the list of 134 businesses that made up FTX Trading’s chapter 11 bankruptcy filing on November 11 as one of them.
Since then, FTX Japan has stated that resuming withdrawals is their top priority; they expect to do it by the end of 2022.
Since it has recently been confirmed that the assets of its users are not included in FTX Japan’s estate, this effectively gives them a way to resume user withdrawals.
“Japanese customer cash and crypto currency should not be part of FTX Japan’s estate given how these assets are held and property interests under Japanese law,” the firm noted.
FTX Japan said its management is in regular dialogue with Japanese regulators and has sent through the first draft of their plan to resume withdrawals, suggesting regular consultations will occur “as key milestones are met.”
