The Japanese auxiliary is one of 134 organizations made up for lost time in FTX’s chapter 11 procedures however has been drafting an arrangement to return client reserves.
After confirming that its customers’ assets are not included in FTX’s bankruptcy proceedings, the Japanese subsidiary of the now-defunct FTX crypto exchange has released a plan to resume withdrawals.
On December 1, the company provided an update stating that it had been able to confirm that the assets of its customers “should not” be included in the estate of FTX Japan due to Japanese regulations requiring crypto exchanges to separate client funds from their own assets.
Landis Rath & Cobb LLP, the law firm that represented FTX Group during the Chapter 11 bankruptcy proceedings, stated that this was the case.
Following the February 2 acquisition of the Japanese crypto exchange Liquid, FTX Japan was only launched in June of this year. Serving the exchange’s Japanese customers was the goal.
On the other hand, similar to its parent company, withdrawals were halted at FTX Japan on November 8 due to liquidity issues.
A few days later, on November 10, the Financial Services Agency of Japan made the announcement that it had taken administrative action against FTX Japan, directing it to cease accepting new deposits and comply with a business improvement order.
On November 11, the company was listed as one of the 134 businesses that were a part of FTX Trading’s chapter 11 bankruptcy filing.
Since then, FTX Japan has stated that their primary goal is to reinstate withdrawals by the end of 2022, according to reports.
As of late, it has been confirmed that FTX Japan’s users’ assets are not considered part of the company’s estate. As a result, they would be able to resume user withdrawals.
The company made the following statement: “Given how these assets are held and property interests under Japanese law, Japanese customer cash and crypto currency should not be part of FTX Japan’s estate.”
The first draft of the company’s plan to resume withdrawals has been submitted to Japanese regulators, according to FTX Japan, indicating that regular consultations will take place “as key milestones are met.”
